8-K
AMERICAN FINANCIAL GROUP INC (AFG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2021
AMERICAN FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
| Ohio | 1-13653 | 31-1544320 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 301 East Fourth Street, Cincinnati, OH | 45202 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 513-579-2121
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| --- | --- | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| --- | --- | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: | |
| --- | --- | |
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
| --- | --- | --- |
| Common Stock | AFG | New York Stock Exchange |
| 5.875% Subordinated Debentures due March 30, 2059 | AFGB | New York Stock Exchange |
| 5.125% Subordinated Debentures due December 15, 2059 | AFGC | New York Stock Exchange |
| 5.625% Subordinated Debentures due June 1, 2060 | AFGD | New York Stock Exchange |
| 4.5% Subordinated Debentures due September 15, 2060 | AFGE | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results Of Operations And Financial Condition. |
|---|
Reference is made to the press release of American Financial Group, Inc. (the “Company”) relating to the announcement of the Company’s results of operations for the third quarter of 2021 and the availability of the Investor Supplement on the Company’s website. The press release was issued on November 2, 2021. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and a copy of the Investor Supplement is attached as Exhibit 99.2 and are incorporated herein by reference.
The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 8.01 | Other Events. |
|---|
In the press release referenced in Item 2.02 above, the Company also announced that it declared a special, one-time cash dividend of $4.00 per share of American Financial Group Common Stock. The dividend is payable on November 22, 2021 to holders of record on November 15, 2021. A copy of the press release is furnished as Exhibit 99.1 and incorporated by reference in this Item 8.01.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (a) | Financial statements of business acquired. Not applicable. |
| --- | --- |
| (b) | Pro forma financial information. Not applicable. |
| --- | --- |
| (c) | Shell company transactions. Not applicable |
| --- | --- |
| (d) | Exhibits |
| --- | --- |
| Exhibit<br>No. | Description |
| --- | --- |
| 99.1 | Earnings Release dated November 2, 2021, reporting American Financial Group Inc. results for the quarter ended September 30, 2021. |
| 99.2 | Investor Supplement – Third Quarter 2021 |
| 104 | Cover page Interactive Date File (embedded within Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN FINANCIAL GROUP, INC. | ||
|---|---|---|
| Date: November 3, 2021 | By: | /s/ Karl J. Grafe |
| Karl J. Grafe | ||
| Vice President |
EX-99.1
Exhibit 99.1
American Financial Group, Inc. Announces Third Quarter Results and Declares Special Dividend
| • | Net earnings per share of $2.56; includes ($0.15) per share inafter-tax non-core items |
|---|---|
| • | Core net operating earnings of $2.71 per share, a 96% increase from the prior year period<br> |
| --- | --- |
| • | Third quarter annualized ROE of 16.6%; annualized core operating ROE of 17.6%<br> |
| --- | --- |
| • | Parent company cash and investments of approximately $2.7 billion;excess capital of $3.0 billion at September 30, 2021 |
| --- | --- |
| • | Announces special cash dividend of $4.00 per share, payableNovember 22, 2021 |
| --- | --- |
| • | Full year 2021 core net operating earnings guidance $10.10 - $10.70 per share, an increase from previousguidance of $8.40 - $9.20 per share |
| --- | --- |
CINCINNATI – November 2, 2021 – American Financial Group, Inc. (NYSE: AFG) today reported 2021 third quarter net earnings attributable to shareholders of $219 million ($2.56 per share) compared to $164 million ($1.86 per share) for the 2020 third quarter. Net earnings for the 2021 third quarter included after-tax non-core realized losses on securities of $12 million ($0.15 per share loss). Comparatively, net earnings in the 2020 third quarter included net favorable after-tax non-core items of $43 million ($0.48 per share). Beginning with the first quarter of 2021 and through the date of sale in May 2021, the results of AFG’s Annuity operations are reported as discontinued operations in accordance with generally accepted accounting principles (GAAP), which included adjusting prior period results to reflect these operations as discontinued. Other details may be found in the table below.
AFG’s book value per share was $61.80 at September 30, 2021. During the third quarter of 2021, AFG declared cash dividends of $6.50 per share, which included a $2.00 per share special dividend paid in August and a $4.00 special dividend paid in October. AFG repurchased $12 million of its common stock at an average price per share of $125.17 (adjusted for the special dividends). Annualized return on equity was 16.6% and 12.9% for the third quarters of 2021 and 2020, respectively.
Core net operating earnings were $231 million ($2.71 per share) for the 2021 third quarter, compared to $121 million ($1.38 per share) in the 2020 third quarter. Core net operating earnings for the third quarters of 2021 and 2020 generated annualized returns on equity of 17.6% and 9.6%, respectively. The year-over-year increase was primarily the result of substantially higher underwriting profit in the Specialty Property and Casualty (“P&C”) insurance operations and significantly higher P&C net investment income, due to the continued strong performance of AFG’s $1.7 billion alternative investment portfolio. Additional details for the 2021 and 2020 third quarters may be found in the table below.
| Three Months Ended September 30, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Components of Pretax Core Operating Earnings | 2021 | 2020^(a)^ | 2021 | 2020^(a)^ | 2021 | 2020^(a)^ | ||||||||||
| Before Impact of<br>Alternative Investments | Alternative<br>Investments, net of DAC | Core Net Operating<br>Earnings, as reported | ||||||||||||||
| In millions, except per share amounts<br><br><br>P&C Pretax Core Operating Earnings | $ | 245 | $ | 177 | $ | 84 | $ | 28 | $ | 329 | $ | 205 | ||||
| Real estate entities and other acquired from Annuity operations | — | — | — | 3 | — | 3 | ||||||||||
| Other expenses | (21 | ) | (29 | ) | — | — | (21 | ) | (29 | ) | ||||||
| Holding company interest expense | (24 | ) | (24 | ) | — | — | (24 | ) | (24 | ) | ||||||
| Pretax Core Operating Earnings | 200 | 124 | 84 | 31 | 284 | 155 | ||||||||||
| Related provision for income taxes | 35 | 28 | 18 | 6 | 53 | 34 | ||||||||||
| Core Net Operating Earnings | $ | 165 | **** | $ | 96 | **** | $ | 66 | $ | 25 | $ | 231 | **** | $ | 121 | **** |
| Core Net Operating Earnings Per Share | $ | 1.94 | $ | 1.10 | $ | 0.77 | 0.28 | $ | 2.71 | $ | 1.38 | |||||
| Weighted Avg Diluted Shares Outstanding | 85.2 | 88.5 | 85.2 | 88.5 | 85.2 | 88.5 | ||||||||||
| Footnote | (a) is contained in the accompanying Notes to Financial Schedules at the end of this release.<br> | |||||||||||||||
| --- | --- |
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Book value per share, excluding unrealized gains related to fixed maturities, was $59.70 per share at September 30, 2021, compared to $63.61 at the end of 2020, reflecting the $20.00 per share in special dividends declared during the first nine months of 2021.
AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (GAAP), include certain items that may not be indicative of its ongoing core operations. The table below identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, ratings agencies and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of discontinued operations, net realized gains and losses, and special items that are not necessarily indicative of operating trends. AFG’s management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG’s management as a basis for strategic planning and forecasting.
| In millions, except per share amounts | Three months ended<br>September 30, | Nine months ended<br>September 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020^(a)^ | 2021 | 2020^(a)^ | |||||||||
| Components of net earnings attributable to shareholders: | ||||||||||||
| Core operating earnings before income taxes | $ | 284 | $ | 155 | $ | 794 | $ | 382 | ||||
| Pretax non-core items: | ||||||||||||
| Realized gains (losses) on securities | (17 | ) | 23 | 103 | (197 | ) | ||||||
| Neon exited lines**^(b)^** | — | (70 | ) | 4 | (122 | ) | ||||||
| Special A&E charges | — | (68 | ) | — | (68 | ) | ||||||
| Other | — | — | (11 | ) | — | |||||||
| Earnings (loss) before income taxes | 267 | 40 | 890 | (5 | ) | |||||||
| Provision (credit) for income taxes: | ||||||||||||
| Core operating earnings | 53 | 34 | 152 | 76 | ||||||||
| Non-core items | (5 | ) | (82 | ) | 12 | (128 | ) | |||||
| Total provision (credit) for income taxes | 48 | (48 | ) | 164 | (52 | ) | ||||||
| Net earnings from continuing operations including noncontrolling interests | 219 | 88 | 726 | 47 | ||||||||
| Discontinued annuity operations | — | 76 | 914 | (20 | ) | |||||||
| Less: net earnings (loss) attributable to noncontrolling interests: | ||||||||||||
| Non-core items | — | — | — | (13 | ) | |||||||
| Net earnings attributable to shareholders | $ | 219 | **** | $ | 164 | **** | $ | 1,640 | **** | $ | 40 | **** |
| Net earnings: | ||||||||||||
| Core net operating<br>earnings**^(c)^** | $ | 231 | $ | 121 | $ | 642 | $ | 306 | ||||
| Non-core items: | ||||||||||||
| Realized gains (losses) on securities | (12 | ) | 18 | 83 | (156 | ) | ||||||
| Neon exited lines**^(b)^** | — | 3 | 3 | (36 | ) | |||||||
| Special A&E charges | — | (54 | ) | — | (54 | ) | ||||||
| Other | — | — | (2 | ) | — | |||||||
| Net earnings from continuing operations | **** | 219 | **** | **** | 88 | **** | **** | 726 | **** | **** | 60 | **** |
| Discontinued annuity operations | — | 76 | 914 | (20 | ) | |||||||
| Net earnings attributable to shareholders | $ | 219 | **** | $ | 164 | **** | $ | 1,640 | **** | $ | 40 | **** |
| Components of earnings per share: | ||||||||||||
| Core net operating earnings^(c)^ | $ | 2.71 | $ | 1.38 | $ | 7.48 | $ | 3.40 | ||||
| Non-core Items: | ||||||||||||
| Realized gains (losses) on securities | (0.15 | ) | 0.20 | 0.95 | (1.72 | ) | ||||||
| Neon exited lines**^(b)^** | — | 0.03 | 0.04 | (0.41 | ) | |||||||
| Special A&E charges | — | (0.61 | ) | — | (0.61 | ) | ||||||
| Other | — | — | (0.02 | ) | — | |||||||
| Diluted net earnings per share from continuing operations | $ | 2.56 | **** | $ | 1.00 | **** | $ | 8.45 | **** | $ | 0.66 | **** |
| Discontinued annuity operations | **** | — | **** | **** | 0.86 | **** | **** | 10.66 | **** | **** | (0.21 | ) |
| Diluted net earnings per share | $ | 2.56 | **** | $ | 1.86 | **** | $ | 19.11 | **** | $ | 0.45 | **** |
Footnotes (a), (b), and (c) are contained in the accompanying Notes to Financial Schedules at the end of this release.
The Company also announced today that its Board of Directors has declared a special cash dividend of $4.00 per share of American Financial Group common stock. The dividend is payable on November 22, 2021 to shareholders of record on November 15, 2021. The aggregate amount of this special dividend will be approximately $340 million. This special dividend is in addition to the Company’s regular quarterly cash dividend of $0.56 per share most recently paid on October 25, 2021. With this special dividend, the Company has declared $24.00 per share in special dividends in 2021.
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S. Craig Lindner and Carl H. Lindner III, AFG’s Co-Chief Executive Officers, issued this statement: “We are extremely pleased with AFG’s performance during the third quarter. Our Specialty P&C businesses reported outstanding underwriting margins, and results in our portfolio of alternative investments continued to exceed our expectations. Annualized core return on equity was nearly 18%. We believe that our disciplined – yet opportunistic – operating philosophy, a lower net catastrophe exposure than our peers, a continued economic recovery and a strong P&C rate environment all contributed to these outstanding results.
“AFG had approximately $3.0 billion of excess capital (including parent company cash and investments of approximately $2.7 billion) at September 30, 2021. Returning capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases is an important and effective component of our capital management strategy. In addition, our excess capital will be deployed into AFG’s core businesses as we identify potential for healthy, profitable organic growth, and opportunities to expand our specialty niche businesses through acquisitions and start-ups that meet our target return thresholds.
“Based on the strong results reported in the first nine months of the year, we now expect AFG’s core net operating earnings in 2021 to be in the range of $10.10 to $10.70, an increase from our previous range of $8.40 to $9.20 per share. Our core earnings per share guidance excludes non-core items such as results of discontinued operations, realized gains and losses and other significant items that are not able to be estimated with reasonable precision, or that may not be indicative of ongoing operations. Furthermore, the above guidance reflects the expectation of an above-average crop year and an annualized return of approximately 10% on alternative investments in the fourth quarter of 2021.”
Property and Casualty Insurance Operations
Pretax core operating earnings in AFG’s P&C Insurance Segment were a record $329 million in the third quarter of 2021, $124 million higher and a 60% increase from the comparable prior year period. The year-over-year improvement was the result of significantly higher P&C underwriting profit and substantially higher P&C net investment income, primarily due to higher earnings from alternative investments.
The Specialty P&C insurance operations generated an underwriting profit of $169 million in the 2021 third quarter, compared to $104 million in the third quarter of 2020, driven primarily by higher year-over-year underwriting profit in our Specialty Casualty Group and to a lesser extent, our Specialty Financial Group. Pretax catastrophe losses, net of reinsurance and inclusive of reinstatement premiums, were $31 million, primarily as a result of losses related to Hurricane Ida. By comparison, catastrophe losses in the comparable prior year period were $57 million. The third quarter 2021 combined ratio was a very strong 89.0%, improving 3.1 points from the 92.1% reported in the comparable prior year period, and includes 2.0 points in catastrophe losses. By comparison, catastrophe losses in the third quarter of 2020 added 2.7 points to the combined ratio. Third quarter 2021 results included 5.4 points of favorable prior year reserve development, compared to 3.7 points in the third quarter of 2020.
AFG recorded $3 million in losses related to COVID-19 related to accident year 2021 in the third quarter of 2021 and recorded favorable reserve development of approximately $3 million related to accident year 2020 COVID-19 reserves based on loss experience. Given the uncertainties surrounding the ultimate number and scope of claims relating to the pandemic, approximately 63% of the $96 million in AFG’s cumulative COVID-19 related losses are held as incurred but not reported (IBNR) reserves at September 30, 2021.
Third quarter 2021 gross and net written premiums were up 19% and 16%, respectively, when compared to the third quarter of 2020. Strong year-over-year growth was reported within each of the Specialty P&C groups as a result of an improving economy, new business opportunities and a strong renewal rate environment.
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Average renewal pricing across our entire P&C Group was up approximately 11% for the quarter. Excluding our workers’ compensation business, renewal pricing was up approximately 13%. Both measures are an improvement over the rate increases reported in the second quarter of 2021. With the exception of workers’ compensation, we are continuing to achieve strong renewal rate increases in the vast majority of our businesses.
Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules.
The Property and Transportation Group reported 2021 third quarter underwriting profit of $45 million, compared to $47 million in the third quarter of 2020. Higher underwriting profits in our crop business and Singapore Branch were more than offset by lower underwriting profit in our transportation, property & inland marine and non-crop agricultural businesses. Catastrophe losses in this group, net of reinsurance and inclusive of reinstatement premiums, were $14 million in the third quarter of 2021, compared to $18 million in the comparable 2020 period.
Gross and net written premiums for the third quarter of 2021 were 26% and 22% higher, respectively, than the comparable 2020 period, with growth reported in all businesses in this group. The growth came primarily from our crop insurance business – primarily the result of higher commodity futures pricing and rate increases – and our transportation businesses, primarily the result of new accounts, combined with strong renewals. Excluding the impact of crop insurance, third quarter 2021 gross and net written premiums increased 14% and 13%, respectively when compared to the 2020 third quarter. Overall renewal rates in this group increased 5% on average for the third quarter of 2021.
The Specialty Casualty Group reported a 2021 third quarter underwriting profit of $110 million, compared to $53 million in the third quarter of 2020, primarily the result of higher profitability in our workers’ compensation, excess and surplus lines, excess liability, and general liability businesses. Underwriting profitability in our workers’ compensation businesses overall continues to be excellent. The businesses in the Specialty Casualty Group achieved a very strong 82.0% calendar year combined ratio overall in the third quarter, an improvement of 8.7 points from the comparable period in 2020. Catastrophe losses for this group were $3 million and $8 million in the third quarters of 2021 and 2020, respectively.
Third quarter 2021 gross and net written premiums increased 15% and 14%, respectively, when compared to the same prior year period. Excluding workers’ compensation, gross and net written premiums grew by 18% and 20%, respectively year-over-year. Nearly all the businesses in this group achieved strong renewal pricing and reported premium growth during the third quarter. Significant renewal rate increases and new business opportunities contributed to higher premiums in our excess & surplus lines business. Renewal rate increases, strong account retention and new business opportunities contributed to higher premiums in our targeted markets businesses. Our mergers and acquisitions liability and executive liability businesses also contributed meaningfully to the year-over-year growth. Renewal pricing for this group was up 13% in the third quarter. Excluding our workers’ compensation businesses, renewal rates in this group were up approximately 18%. Both measures are improvements from the rate increases achieved in the second quarter of 2021.
The Specialty Financial Group reported an underwriting profit of $26 million in the third quarter of 2021, compared to $13 million in the third quarter of 2020, primarily as a result of higher year-over-year underwriting profit in our surety and financial institutions businesses. Catastrophe losses for this group, net of reinsurance and inclusive of reinstatement premiums, were $14 million in the third quarter of 2021, compared to $13 million in the prior year quarter. This group continued to achieve excellent underwriting margins and reported an 84.2% combined ratio for the third quarter of 2021.
Third quarter 2021 gross and net written premiums in this group were up 9% and 8%, respectively, when compared to the prior year period. Nearly all businesses in this group reported growth, including our surety, fidelity & crime and lender services businesses. Renewal pricing in this group was up approximately 8% for the quarter, consistent with results in the second quarter of 2021.
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Carl Lindner III stated, “For the third quarter in a row, AFG achieved record P&C operating earnings. Underwriting margins across our portfolio of businesses were excellent, with an overall Specialty P&C combined ratio of 89%. Catastrophe losses were manageable, we are continuing to achieve strong renewal pricing, each of our Specialty P&C groups reported healthy growth and we are projecting an above average crop year.
Mr. Lindner added, “Based on results through the first nine months and higher than expected crop earnings, we now expect an overall 2021 calendar year combined ratio in the range of 86% to 88%, an improvement from the range of 88% to 90% estimated previously, and we now expect net written premiums to be 11% to 14% higher than the $5.0 billion reported in 2020, which is an increase from the range of +10% to +13% estimated previously. We expect the market to remain firm throughout the remainder of the year, allowing us to act on business opportunities and achieve solid renewal rate increases.”
Further details about AFG’s Specialty P&C operations may be found in the accompanying schedules and in our Quarterly Investor Supplement, which is posted on our website.
A&E Reserves
During the third quarter of 2021, AFG conducted an in-depth comprehensive review of its asbestos and environmental (A&E) exposures relating to the run-off operations of its P&C Group and its exposures related to former railroad and manufacturing operations and sites. During the review, no new trends were identified and recent claims activity was generally consistent with our expectations resulting from our 2020 external study. As a result, the review resulted in no net change to the P&C Group’s A&E reserves, and a minor increase in AFG’s liabilities for the environmental exposures of its former railroad and manufacturing operations. This minor adjustment is included in AFG’s core operating earnings for the three months ended September 30, 2021.
At September 30, 2021, the P&C Group’s insurance reserves include A&E reserves of $414 million, net of reinsurance recoverables. At September 30, 2021, the property and casualty insurance segment’s three-year survival ratios were 25.7 times paid losses for asbestos reserves, 24.4 times paid losses for environmental reserves and 25.1 times paid losses for total A&E reserves. These ratios compare favorably with industry data compiled by A.M. Best as of December 31, 2020, which indicate that industry survival ratios were 7.9 for asbestos, 8.5 for environmental, and 8.1 for total A&E reserves.
Investments
P&C Net Investment Income – For the nine months ended September 30, 2021, P&C net investment income was approximately 66% higher than the comparable 2020 period and included significantly higher earnings from alternative investments. Earnings from alternative investments may vary from quarter to quarter based on the reported results of the underlying investments, and generally are reported on a quarter lag. The annualized return on alternative investments in the third quarter of 2021 was 20.3%. The cumulative return on these investments over the past five calendar years was approximately 10%. Excluding the impact of alternative investments, P&C net investment income for the nine months ended September 30, 2021 decreased 8% year-over-year, reflecting lower market interest rates. Assuming an annualized return of approximately 10% on our $1.7 billion of alternative investments in the fourth quarter would result in an annual return on this portfolio of approximately 20% in 2021.
Non-Core Net Realized Gains (Losses) – AFG recorded third quarter 2021 net realized losses on securities of $12 million ($0.15 loss per share) after tax, which included $12 million ($0.15 per share) in after-tax net losses to adjust equity securities that the Company continued to own at September 30, 2021, to fair value. By comparison, AFG recorded third quarter 2020 net realized gains on securities of $18 million ($0.20 per share) after tax. Prior period results have been adjusted to reflect the reclassification of AFG’s annuity operations to discontinued operations. See the table below under “Discontinued Annuity Operations” for additional information.
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After-tax unrealized gains on fixed maturities were $178 million at September 30, 2021. Our portfolio continues to be high quality, with 88% of our fixed maturity portfolio rated investment grade and 97% of our P&C fixed maturity portfolio with a National Association of Insurance Commissioners’ designation of NAIC 1 or 2, its highest two categories.
More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
Discontinued Annuity Operations
On May 28, 2021, AFG completed the sale of its Annuity business to Mass Mutual. Initial cash proceeds from the sale (based on the preliminary closing balance sheet) were $3.5 billion. AFG recognized an after-tax non-core gain on the sale of $656 million ($7.62 per AFG share) in the first half of 2021. Both the proceeds and the gain are subject to post-closing adjustments, which are not expected to be material. Beginning with the first quarter of 2021 and through the sale date, AFG reported the results of its Annuity operations as discontinued operations, in accordance with generally accepted accounting principles (GAAP), which included adjusting prior period results to reflect these operations as discontinued. A reconciliation of amounts as previously presented to amounts reported as Discontinued Annuity Operations for the nine-month period ended September 30, 2021 (through the May 2021 sale date) and the three- and nine-month periods ended September 30, 2020 appears in our Quarterly Investor Supplement, which is posted on our website.
About American Financial Group, Inc.
American Financial Group is an insurance holding company, based in Cincinnati, Ohio. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.
Forward Looking Statements
This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company’s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings, investment activities and the amount and timing of share repurchases; recoverability of asset values; expected losses and the adequacy of reserves for asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.
Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including, but not limited to: changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad; performance of securities markets; new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in AFG’s investment portfolio; the availability of capital; changes in insurance law or regulation, including changes in statutory accounting rules, including modifications to capital requirements; the effects of the COVID-19 outbreak, including the effects on the international and national economy and credit markets,
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legislative or regulatory developments affecting the insurance industry, quarantines or other travel or health-related restrictions; changes in the legal environment affecting AFG or its customers; tax law and accounting changes; levels of natural catastrophes and severe weather, terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from pandemics, civil unrest and other major losses; disruption caused by cyber-attacks or other technology breaches or failures by AFG or its business partners and service providers, which could negatively impact AFG’s business and/or expose AFG to litigation; development of insurance loss reserves and establishment of other reserves, particularly with respect to amounts associated with asbestos and environmental claims; availability of reinsurance and ability of reinsurers to pay their obligations; competitive pressures; the ability to obtain adequate rates and policy terms; changes in AFG’s credit ratings or the financial strength ratings assigned by major ratings agencies to AFG’s operating subsidiaries; the impact of the conditions in the international financial markets and the global economy relating to AFG’s international operations; and other factors identified in AFG’s filings with the Securities and Exchange Commission.
The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.
Conference Call
The Company will hold a conference call to discuss 2021 third quarter results at 11:30 a.m. (ET) tomorrow, Wednesday, November 3, 2021. Toll-free telephone access will be available by dialing 1-877-459-8719 (international dial-in 424-276-6843). The conference ID for the live call is 1653603. Please dial in five to ten minutes prior to the scheduled start time of the call.
A replay will be available two hours following the completion of the call and will remain available until November 10, 2021. To listen to the replay, dial 1-855-859-2056 (international dial-in 404-537-3406) and provide the conference ID 1653603.
The conference call and accompanying webcast slides will also be broadcast live over the Internet. To access the event, click the following link: https://www.afginc.com/news-and-events/event-calendar. Alternatively, you can choose Events from the Investor Relations page at www.AFGinc.com.
An archived webcast will be available immediately after the call via the same link on our website until November 10, 2021.
Contact:
Diane P. Weidner, IRC
Vice President – Investor & Media Relations
(513) 369-5713
Websites:
www.AFGinc.com
www.GreatAmericanInsuranceGroup.com
#
(Financial summaries follow)
This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.
AFG2021-25
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AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share Data)
| Three months ended<br>September 30, | Nine months ended<br>September 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | ||||||||
| Revenues | |||||||||||
| P&C insurance net earned premiums | $ | 1,529 | $ | 1,381 | $ | 3,952 | $ | 3,774 | |||
| Net investment income | 169 | 122 | 521 | 314 | |||||||
| Realized gains (losses) on: | |||||||||||
| Securities | (17 | ) | 23 | 103 | (197 | ) | |||||
| Subsidiaries | — | (30 | ) | 4 | (30 | ) | |||||
| Income of managed investment entities: | |||||||||||
| Investment income | 45 | 46 | 135 | 154 | |||||||
| Gain (loss) on change in fair value of assets/liabilities | 1 | (5 | ) | 9 | (21 | ) | |||||
| Other income | 27 | 19 | 70 | 62 | |||||||
| Total revenues | 1,754 | 1,556 | 4,794 | 4,056 | |||||||
| Costs and expenses | |||||||||||
| P&C insurance losses & expenses | 1,371 | 1,369 | 3,522 | 3,676 | |||||||
| Interest charges on borrowed money | 24 | 24 | 71 | 64 | |||||||
| Expenses of managed investment entities | 37 | 34 | 115 | 129 | |||||||
| Other expenses | 55 | 89 | 196 | 192 | |||||||
| Total costs and expenses | 1,487 | 1,516 | 3,904 | 4,061 | |||||||
| Earnings (loss) from continuing operations before income taxes | 267 | 40 | 890 | (5 | ) | ||||||
| Provision (credit) for income taxes | 48 | (48 | ) | 164 | (52 | ) | |||||
| Net earnings from continuing operations, including noncontrolling interests | 219 | 88 | 726 | 47 | |||||||
| Net earnings (loss) from discontinued operations | — | 76 | 914 | (20 | ) | ||||||
| Net earnings, including controlling interests | 219 | 164 | 1,640 | 27 | |||||||
| Less: Net earnings (loss) from continuing operations attributable to noncontrolling<br>interests | — | — | — | (13 | ) | ||||||
| Net earnings attributable to shareholders | $ | 219 | $ | 164 | $ | 1,640 | $ | 40 | |||
| Earnings (loss) attributable to shareholders per diluted common share: | |||||||||||
| Continuing operations | $ | 2.56 | $ | 1.00 | $ | 8.45 | $ | 0.66 | |||
| Discontinued operations | — | 0.86 | 10.66 | (0.21 | ) | ||||||
| Diluted earnings attributable to shareholders | $ | 2.56 | $ | 1.86 | $ | 19.11 | $ | 0.45 | |||
| Average number of diluted shares | 85.2 | 88.5 | 85.8 | 89.9 |
Page 8
AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA
(In Millions, Except Per Share Data)
| Selected Balance Sheet Data: | September 30,<br>2021 | December 31,<br>2020 | ||
|---|---|---|---|---|
| Total cash and investments | $ | 16,387 | $ | 13,494 |
| Long-term debt | $ | 1,964 | $ | 1,963 |
| Shareholders’ equity**^(c)^** | $ | 5,240 | $ | 6,789 |
| Shareholders’ equity (excluding unrealized gains/losses related to fixed maturities)^(c)^ | $ | 5,062 | $ | 5,493 |
| Book value per share | $ | 61.80 | $ | 78.62 |
| Book value per share (excluding unrealized gains/losses related to fixed maturities) | $ | 59.70 | $ | 63.61 |
| Common Shares Outstanding | 84.8 | 86.3 |
Footnote (c) is contained in the accompanying Notes to Financial Schedules at the end of this release.
Page 9
AMERICAN FINANCIAL GROUP, INC.
SPECIALTY P&C OPERATIONS
(Dollars in Millions)
| Three months ended<br>September 30, | Pct.<br>Change | Nine months ended<br>September 30, | Pct.<br>Change | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Gross written premiums | $ | 2,656 | $ | 2,223 | 19 | % | $ | 6,209 | $ | 5,288 | 17 | % | ||||||
| Net written premiums | $ | 1,729 | $ | 1,488 | 16 | % | $ | 4,303 | $ | 3,776 | 14 | % | ||||||
| Ratios (GAAP): | ||||||||||||||||||
| Loss & LAE ratio | 62.4 | % | 63.8 | % | 59.0 | % | 61.8 | % | ||||||||||
| Underwriting expense ratio | 26.6 | % | 28.3 | % | 29.4 | % | 31.4 | % | ||||||||||
| Specialty Combined Ratio | 89.0 | % | 92.1 | % | 88.4 | % | 93.2 | % | ||||||||||
| Combined Ratio – P&C Segment | 89.0 | % | 98.8 | % | 88.4 | % | 97.0 | % | ||||||||||
| Supplemental Information:^(d)^ | ||||||||||||||||||
| Gross Written Premiums: | ||||||||||||||||||
| Property & Transportation | $ | 1,334 | $ | 1,061 | 26 | % | $ | 2,705 | $ | 2,166 | 25 | % | ||||||
| Specialty Casualty | 1,121 | 978 | 15 | % | 2,922 | 2,579 | 13 | % | ||||||||||
| Specialty Financial | 201 | 184 | 9 | % | 582 | 543 | 7 | % | ||||||||||
| $ | 2,656 | $ | 2,223 | 19 | % | $ | 6,209 | $ | 5,288 | 17 | % | |||||||
| Net Written Premiums: | ||||||||||||||||||
| Property & Transportation | $ | 773 | $ | 635 | 22 | % | $ | 1,740 | $ | 1,447 | 20 | % | ||||||
| Specialty Casualty | 732 | 642 | 14 | % | 1,912 | 1,739 | 10 | % | ||||||||||
| Specialty Financial | 165 | 153 | 8 | % | 485 | 441 | 10 | % | ||||||||||
| Other | 59 | 58 | 2 | % | 166 | 149 | 11 | % | ||||||||||
| $ | 1,729 | $ | 1,488 | 16 | % | $ | 4,303 | $ | 3,776 | 14 | % | |||||||
| Combined Ratio (GAAP): | ||||||||||||||||||
| Property & Transportation | 93.5 | % | 91.9 | % | 89.6 | % | 92.1 | % | ||||||||||
| Specialty Casualty | 82.0 | % | 90.7 | % | 86.6 | % | 92.1 | % | ||||||||||
| Specialty Financial | 84.2 | % | 91.6 | % | 84.9 | % | 93.5 | % | ||||||||||
| Aggregate Specialty Group | 89.0 | % | 92.1 | % | 88.4 | % | 93.2 | % | ||||||||||
| Three months ended<br>September 30, | Nine months ended<br>September 30, | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Reserve Development (Favorable)/Adverse: | ||||||||||||||||||
| Property & Transportation | $ | (18 | ) | $ | (26 | ) | $ | (101 | ) | $ | (78 | ) | ||||||
| Specialty Casualty | (56 | ) | (16 | ) | (85 | ) | (91 | ) | ||||||||||
| Specialty Financial | (18 | ) | (9 | ) | (38 | ) | (22 | ) | ||||||||||
| Other Specialty | 9 | 3 | 14 | 10 | ||||||||||||||
| Specialty Group | (83 | ) | (48 | ) | (210 | ) | (181 | ) | ||||||||||
| Special A&E Reserve Charge – P&C<br>Run-off | — | 47 | — | 47 | ||||||||||||||
| Other | 1 | 1 | 2 | 15 | ||||||||||||||
| Total Reserve Development | $ | (82 | ) | $ | — | $ | (208 | ) | $ | (119 | ) | |||||||
| Points on Combined Ratio: | ||||||||||||||||||
| Property & Transportation | (2.5 | ) | (4.5 | ) | (6.5 | ) | (5.8 | ) | ||||||||||
| Specialty Casualty | (9.1 | ) | (2.9 | ) | (4.8 | ) | (5.5 | ) | ||||||||||
| Specialty Financial | (11.2 | ) | (5.7 | ) | (7.9 | ) | (4.8 | ) | ||||||||||
| Aggregate Specialty Group | (5.4 | ) | (3.7 | ) | (5.3 | ) | (5.0 | ) | ||||||||||
| Total P&C Segment | (5.4 | ) | — | (5.2 | ) | (3.1 | ) |
Footnote (d) is contained in the accompanying Notes to Financial Schedules at the end of this release.
Page 10
AMERICAN FINANCIAL GROUP, INC.
Notes to Financial Schedules
| a) | On May 28, 2021, AFG completed the sale of its Annuity business to MassMutual. The results of<br>AFG’s Annuity operations are reported as discontinued operations beginning with the first quarter of 2021 and through the date of sale, in accordance with generally accepted accounting principles (GAAP), which included adjusting prior period<br>results to reflect these operations as discontinued. | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| b) | In January 2020, AFG announced its plans to exit the Lloyd’s of London insurance market and actions it<br>had initiated to place its Lloyd’s subsidiaries including its Lloyd’s Managing Agency, Neon Underwriting Ltd., into run-off. AFG recorded a net favorable $3 million ($0.03 per share) non-core, after-tax impact from Neon Exited Lines in the third quarter of 2020. AFG sold the legal entities that owned its Lloyd’s of London insurer, Neon, to RiverStone<br>Holdings Limited in a transaction that closed in the fourth quarter of 2020. In the second quarter of 2021, AFG recognized an after-tax non-core gain of $3 million<br>($0.03 per share) related to contingent consideration received on the sale of Neon. | |||||||||||
| --- | --- | |||||||||||
| c) | Components of core net operating earnings (dollars in millions): | |||||||||||
| --- | --- | |||||||||||
| Three months ended<br>September 30, | Nine months ended<br>September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Core Operating Earnings before Income Taxes: | ||||||||||||
| P&C insurance segment | $ | 329 | $ | 205 | $ | 905 | $ | 502 | ||||
| Real estate entities and other acquired from Annuity operations | — | 3 | 50 | 10 | ||||||||
| Interest and other corporate expenses | (45 | ) | (53 | ) | (161 | ) | (130 | ) | ||||
| Core operating earnings before income taxes | 284 | 155 | 794 | 382 | ||||||||
| Related income taxes | 53 | 34 | 152 | 76 | ||||||||
| Core net operating earnings | $ | 231 | $ | 121 | $ | 642 | $ | 306 | ||||
| d) | Shareholders’ Equity at September 30, 2021 includes $178 million ($2.10 per share) in<br>unrealized after-tax gains on fixed maturities. Shareholders’ Equity at December 31, 2020 includes $1.3 billion ($14.54 per share) in unrealized after-tax<br>gains on fixed maturities and $41 million ($0.47 per share) in unrealized after-tax gains on fixed maturity-related cash flow hedges. | |||||||||||
| --- | --- | |||||||||||
| e) | Supplemental Notes: | |||||||||||
| --- | --- | |||||||||||
| • | Property & Transportation includes primarily physical damage and liability<br>coverage for buses and trucks, inland and ocean marine, agricultural-related products and other commercial property coverages. | |||||||||||
| --- | --- | |||||||||||
| • | Specialty Casualty includes primarily excess and surplus, general liability, executive liability,<br>professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.<br> | |||||||||||
| --- | --- | |||||||||||
| • | Specialty Financial includes risk management insurance programs for lending and leasing institutions<br>(including equipment leasing and collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance. | |||||||||||
| --- | --- | |||||||||||
| • | Other includes an internal reinsurance facility. | |||||||||||
| --- | --- |
Page 11
EX-99.2
Exhibit 99.2
| American Financial Group, Inc.<br><br><br>Investor Supplement—Third Quarter 2021<br> <br><br><br><br>November 2, 2021<br> <br><br><br><br>American Financial Group, Inc.<br> <br>Corporate Headquarters<br><br><br>Great American Insurance Group Tower<br> <br>301 E Fourth Street<br><br><br>Cincinnati, OH 45202<br> <br>513 579 6739 | ||
|---|---|---|
| American Financial Group, Inc.<br><br><br>Table of Contents—Investor Supplement—Third Quarter 2021 | ||
| --- | ||
| Section | Page | |
| --- | --- | --- |
| Table of Contents—Investor Supplement—Third Quarter 2021 | 2 | |
| Financial Highlights | 3 | |
| Summary of Earnings | 4 | |
| Earnings Per Share Summary | 5 | |
| Property and Casualty Insurance Segment | ||
| Property and Casualty Insurance—Summary Underwriting Results (GAAP) | 6 | |
| Specialty—Underwriting Results (GAAP) | 7 | |
| Property and Transportation—Underwriting Results (GAAP) | 8 | |
| Specialty Casualty—Underwriting Results (GAAP) | 9 | |
| Specialty Financial—Underwriting Results (GAAP) | 10 | |
| Other Specialty—Underwriting Results (GAAP) | 11 | |
| Annuity Segment | ||
| Discontinued Annuity Operations | 12 | |
| Consolidated Balance Sheet / Book Value / Debt | ||
| Consolidated Balance Sheet | 13 | |
| Book Value Per Share and Price / Book Summary | 14 | |
| Capitalization | 15 | |
| Additional Supplemental Information | 16 | |
| Consolidated Investment Supplement | ||
| Total Cash and Investments | 17 | |
| Net Investment Income From Continuing Operations | 18 | |
| Alternative Investments—Continuing Operations | 19 | |
| Fixed Maturities—By Security Type—AFG Consolidated | 20 | |
| Appendix | ||
| A. Fixed Maturities by Credit Rating & NAIC Designation by Type 9/30/2021 | 21 | |
| B. Fixed Maturities by Credit Rating & NAIC Designation by Type 12/31/2020 | 22 | |
| C. Corporate Securities by Credit Rating & NAIC Designation by Industry<br>9/30/2021 | 23 | |
| D. Corporate Securities by Credit Rating & NAIC Designation by Industry<br>12/31/2020 | 24 | |
| E. Asset-Backed Securities by Credit Rating & NAIC Designation by Collateral Type<br>9/30/2021 | 25 | |
| F. Asset-Backed Securities by Credit Rating & NAIC Designation by Collateral Type<br>12/31/2020 | 26 | |
| G. Real Estate-Related Investments 9/30/2021 | 27 | |
| H. Real Estate-Related Investments 12/31/2020 | 28 |
Page 2
| American Financial Group, Inc. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Financial Highlights | |||||||||||||||||||||
| (in millions, except per share information) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Highlights | |||||||||||||||||||||
| Net earnings | $ | 219 | $ | 1,002 | $ | 419 | $ | 692 | $ | 164 | $ | 1,640 | $ | 40 | |||||||
| Net earnings from continuing operations | 219 | 240 | 267 | 265 | 88 | 726 | 60 | ||||||||||||||
| Core net operating earnings | 231 | 205 | 206 | 175 | 121 | 642 | 306 | ||||||||||||||
| Total assets | 29,942 | 28,780 | 74,197 | 73,710 | 73,234 | 29,942 | 73,234 | ||||||||||||||
| Adjusted shareholders’ equity (a) | 5,062 | 5,396 | 5,695 | 5,493 | 5,087 | 5,062 | 5,087 | ||||||||||||||
| Property and Casualty net written premiums | 1,729 | 1,369 | 1,205 | 1,216 | 1,488 | 4,303 | 3,776 | ||||||||||||||
| Per share data | |||||||||||||||||||||
| Diluted earnings per share | $ | 2.56 | $ | 11.70 | $ | 4.84 | $ | 7.93 | $ | 1.86 | $ | 19.11 | $ | 0.45 | |||||||
| Diluted earnings per share from continuing operations | 2.56 | 2.81 | 3.08 | 3.03 | 1.00 | 8.45 | 0.66 | ||||||||||||||
| Core net operating earnings per share | 2.71 | 2.39 | 2.38 | 2.01 | 1.38 | 7.48 | 3.40 | ||||||||||||||
| Adjusted book value per share (a) | 59.70 | 63.70 | 66.89 | 63.61 | 58.29 | 59.70 | 58.29 | ||||||||||||||
| Dividends per common share | 6.5000 | 14.5000 | 0.5000 | 2.5000 | 0.4500 | 21.5000 | 1.3500 | ||||||||||||||
| Financial ratios | |||||||||||||||||||||
| Annualized return on equity (b) | 16.6 | % | 72.0 | % | 29.9 | % | 52.1 | % | 12.9 | % | 40.3 | % | 1.0 | % | |||||||
| Annualized core operating return on equity (b) | 17.6 | % | 14.7 | % | 14.7 | % | 13.2 | % | 9.6 | % | 15.8 | % | 7.9 | % | |||||||
| Property and Casualty combined ratio—Specialty: | |||||||||||||||||||||
| Loss & LAE ratio | 62.4 | % | 57.2 | % | 56.8 | % | 58.6 | % | 63.8 | % | 59.0 | % | 61.8 | % | |||||||
| Underwriting expense ratio | 26.6 | % | 30.7 | % | 31.7 | % | 27.6 | % | 28.3 | % | 29.4 | % | 31.4 | % | |||||||
| Combined ratio—Specialty | 89.0 | % | 87.9 | % | 88.5 | % | 86.2 | % | 92.1 | % | 88.4 | % | 93.2 | % | |||||||
| (a) | Excludes unrealized gains related to fixed maturity investments, a reconciliation to the GAAP measure is on<br>page 14. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (b) | Excludes accumulated other comprehensive income. | ||||||||||||||||||||
| --- | --- |
Page 3
| American Financial Group, Inc. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Summary of Earnings | |||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Property and Casualty Insurance | |||||||||||||||||||||
| Underwriting profit | $ | 168 | $ | 152 | $ | 134 | $ | 163 | $ | 103 | $ | 454 | $ | 243 | |||||||
| Net investment income | 165 | 143 | 159 | 122 | 111 | 467 | 282 | ||||||||||||||
| Other expense | (4 | ) | (7 | ) | (5 | ) | (11 | ) | (9 | ) | (16 | ) | (23 | ) | |||||||
| Property and Casualty Insurance operating earnings | 329 | 288 | 288 | 274 | 205 | 905 | 502 | ||||||||||||||
| Real estate entities and other acquired from Annuity | — | 22 | 28 | 9 | 3 | 50 | 10 | ||||||||||||||
| Interest expense of parent holding companies | (24 | ) | (23 | ) | (24 | ) | (24 | ) | (24 | ) | (71 | ) | (64 | ) | |||||||
| Other expense | (21 | ) | (35 | ) | (34 | ) | (32 | ) | (29 | ) | (90 | ) | (66 | ) | |||||||
| Pretax core operating earnings | 284 | 252 | 258 | 227 | 155 | 794 | 382 | ||||||||||||||
| Income tax expense | 53 | 47 | 52 | 52 | 34 | 152 | 76 | ||||||||||||||
| Core net operating earnings | **** | 231 | **** | **** | 205 | **** | **** | 206 | **** | **** | 175 | **** | **** | 121 | **** | **** | 642 | **** | **** | 306 | **** |
| Non-core items, net of tax: | |||||||||||||||||||||
| Realized gains (losses) on securities | (12 | ) | 34 | 61 | 97 | 18 | 83 | (156 | ) | ||||||||||||
| Special A&E charges: | |||||||||||||||||||||
| Property and Casualty Insurance run-off<br>operations | — | — | — | — | (37 | ) | — | (37 | ) | ||||||||||||
| Former Railroad and Manufacturing operations | — | — | — | — | (17 | ) | — | (17 | ) | ||||||||||||
| Neon exited lines | — | 3 | — | (3 | ) | 3 | 3 | (36 | ) | ||||||||||||
| Other non-core items | — | (2 | ) | — | (4 | ) | — | (2 | ) | — | |||||||||||
| Net earnings from continuing operations | $ | 219 | **** | $ | 240 | **** | $ | 267 | **** | $ | 265 | **** | $ | 88 | **** | $ | 726 | **** | $ | 60 | **** |
| Discontinued Annuity operations | — | 762 | 152 | 427 | 76 | 914 | (20 | ) | |||||||||||||
| Net earnings | $ | 219 | **** | $ | 1,002 | **** | $ | 419 | **** | $ | 692 | **** | $ | 164 | **** | $ | 1,640 | **** | $ | 40 | **** |
Page 4
| American Financial Group, Inc. | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Per Share Summary | ||||||||||||||||||||
| (in millions, except per share information) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||
| Core net operating earnings | $ | 231 | **** | $ | 205 | **** | $ | 206 | $ | 175 | **** | $ | 121 | **** | $ | 642 | **** | $ | 306 | **** |
| Net earnings from continuing operations | $ | 219 | **** | $ | 240 | **** | $ | 267 | $ | 265 | **** | $ | 88 | **** | $ | 726 | **** | $ | 60 | **** |
| Net earnings | $ | 219 | **** | $ | 1,002 | **** | $ | 419 | $ | 692 | **** | $ | 164 | **** | $ | 1,640 | **** | $ | 40 | **** |
| Average number of diluted shares—core | 85.171 | 85.618 | 86.577 | 87.156 | 88.546 | 85.785 | 89.889 | |||||||||||||
| Average number of diluted shares—net | 85.171 | 85.618 | 86.577 | 87.156 | 88.546 | 85.785 | 89.889 | |||||||||||||
| Diluted earnings per share: | ||||||||||||||||||||
| Core net operating earnings per share | $ | 2.71 | **** | $ | 2.39 | **** | $ | 2.38 | $ | 2.01 | **** | $ | 1.38 | **** | $ | 7.48 | **** | $ | 3.40 | **** |
| Realized gains (losses) on securities | (0.15 | ) | 0.40 | 0.70 | 1.10 | 0.20 | 0.95 | (1.72 | ) | |||||||||||
| Special A&E charges: | ||||||||||||||||||||
| Property and Casualty Insurance run-off<br>operations | — | — | — | — | (0.42 | ) | — | (0.42 | ) | |||||||||||
| Former Railroad and Manufacturing operations | — | — | — | — | (0.19 | ) | — | (0.19 | ) | |||||||||||
| Neon exited lines | — | 0.04 | — | (0.04 | ) | 0.03 | 0.04 | (0.41 | ) | |||||||||||
| Other non-core items | — | (0.02 | ) | — | (0.04 | ) | — | (0.02 | ) | — | ||||||||||
| Diluted earnings per share, continuing operations | $ | 2.56 | **** | $ | 2.81 | **** | $ | 3.08 | $ | 3.03 | **** | $ | 1.00 | **** | $ | 8.45 | **** | $ | 0.66 | **** |
| Discontinued Annuity operations | — | 8.89 | 1.76 | 4.90 | 0.86 | 10.66 | (0.21 | ) | ||||||||||||
| Diluted earnings per share | $ | 2.56 | **** | $ | 11.70 | **** | $ | 4.84 | $ | 7.93 | **** | $ | 1.86 | **** | $ | 19.11 | **** | $ | 0.45 | **** |
Page 5
| American Financial Group, Inc. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property and Casualty Insurance—Summary Underwriting Results (GAAP) | |||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Property and Transportation | $ | 45 | $ | 62 | $ | 56 | $ | 74 | $ | 47 | $ | 163 | $ | 107 | |||||||
| Specialty Casualty | 110 | 71 | 56 | 91 | 53 | 237 | 132 | ||||||||||||||
| Specialty Financial | 26 | 21 | 25 | 20 | 13 | 72 | 30 | ||||||||||||||
| Other Specialty | (12 | ) | (1 | ) | (3 | ) | (6 | ) | (9 | ) | (16 | ) | (22 | ) | |||||||
| Underwriting profit—Specialty | **** | 169 | **** | **** | 153 | **** | **** | 134 | **** | **** | 179 | **** | **** | 104 | **** | **** | 456 | **** | **** | 247 | **** |
| Other core charges, included in loss and LAE | (1 | ) | (1 | ) | — | (16 | ) | (1 | ) | (2 | ) | (4 | ) | ||||||||
| Underwriting profit—Core | **** | 168 | **** | **** | 152 | **** | **** | 134 | **** | **** | 163 | **** | **** | 103 | **** | **** | 454 | **** | **** | 243 | **** |
| Special A&E charges, included in loss and LAE | — | — | — | — | (47 | ) | — | (47 | ) | ||||||||||||
| Neon exited lines (a) | — | — | — | (53 | ) | (38 | ) | — | (82 | ) | |||||||||||
| Underwriting profit (loss)—Property and Casualty Insurance | $ | 168 | **** | $ | 152 | **** | $ | 134 | **** | $ | 110 | **** | $ | 18 | **** | $ | 454 | **** | $ | 114 | **** |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | $ | 3 | $ | 2 | $ | 9 | $ | — | $ | — | $ | 14 | $ | 115 | |||||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | 1 | $ | 11 | $ | (3 | ) | $ | 5 | $ | 12 | $ | 5 | ||||||
| Catastrophe loss | 31 | 10 | 20 | 41 | 52 | 61 | 87 | ||||||||||||||
| Total current accident year catastrophe losses | $ | 31 | $ | 11 | $ | 31 | $ | 38 | $ | 57 | $ | 73 | $ | 92 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | (82 | ) | $ | (67 | ) | $ | (59 | ) | $ | (8 | ) | $ | — | $ | (208 | ) | $ | (119 | ) | |
| Combined ratio: | |||||||||||||||||||||
| Property and Transportation | 93.5 | % | 86.6 | % | 85.6 | % | 85.8 | % | 91.9 | % | 89.6 | % | 92.1 | % | |||||||
| Specialty Casualty | 82.0 | % | 87.9 | % | 90.2 | % | 84.0 | % | 90.7 | % | 86.6 | % | 92.1 | % | |||||||
| Specialty Financial | 84.2 | % | 86.4 | % | 84.1 | % | 86.8 | % | 91.6 | % | 84.9 | % | 93.5 | % | |||||||
| Other Specialty | 122.5 | % | 103.2 | % | 104.6 | % | 116.9 | % | 115.6 | % | 110.2 | % | 115.7 | % | |||||||
| Combined ratio—Specialty | **** | 89.0 | % | **** | 87.9 | % | **** | 88.5 | % | **** | 86.2 | % | **** | 92.1 | % | **** | 88.4 | % | **** | 93.2 | % |
| Other core charges | 0.0 | % | 0.0 | % | 0.1 | % | 1.2 | % | 0.1 | % | 0.0 | % | 0.1 | % | |||||||
| Neon exited lines charge | 0.0 | % | 0.0 | % | 0.0 | % | 4.2 | % | 3.1 | % | 0.0 | % | 2.4 | % | |||||||
| Special A&E charges | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 3.5 | % | 0.0 | % | 1.3 | % | |||||||
| Combined ratio | **** | 89.0 | % | **** | 87.9 | % | **** | 88.6 | % | **** | 91.6 | % | **** | 98.8 | % | **** | 88.4 | % | **** | 97.0 | % |
| P&C combined ratio excl. COVID-19 related losses,<br>catastrophe losses, and prior year loss reserve development | 92.3 | % | 92.2 | % | 91.2 | % | 89.1 | % | 95.0 | % | 91.8 | % | 94.8 | % | |||||||
| Loss and LAE components—property and casualty insurance | |||||||||||||||||||||
| Current accident year, excluding COVID-19 related and<br>catastrophe losses | 65.7 | % | 61.5 | % | 59.5 | % | 60.1 | % | 66.0 | % | 62.4 | % | 62.5 | % | |||||||
| COVID-19 related losses | 0.1 | % | 0.2 | % | 0.8 | % | 0.0 | % | 0.0 | % | 0.3 | % | 3.0 | % | |||||||
| Current accident year catastrophe losses | 2.0 | % | 0.9 | % | 1.7 | % | 3.1 | % | 3.8 | % | 1.5 | % | 2.3 | % | |||||||
| Prior accident year loss reserve development | (5.4 | %) | (5.4 | %) | (5.1 | %) | (0.6 | %) | 0.0 | % | (5.2 | %) | (3.1 | %) | |||||||
| Loss and LAE ratio | **** | 62.4 | % | **** | 57.2 | % | **** | 56.9 | % | **** | 62.6 | % | **** | 69.8 | % | **** | 59.0 | % | **** | 64.7 | % |
| (a) | In the fourth quarter of 2020, AFG recorded $55 million in<br>non-core losses from Neon’s operations and a $1 million reduction in the estimated tax benefit related to the sale of Neon, partially offset by a $53 million favorable adjustment to the<br>estimated loss on sale recorded in Q3. | ||||||||||||||||||||
| --- | --- |
Page 6
| American Financial Group, Inc. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Specialty—Underwriting Results (GAAP) | |||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Gross written premiums | $ | 2,656 | $ | 1,937 | $ | 1,616 | $ | 1,707 | $ | 2,223 | $ | 6,209 | $ | 5,288 | |||||||
| Ceded reinsurance premiums | (927 | ) | (568 | ) | (411 | ) | (491 | ) | (735 | ) | (1,906 | ) | (1,512 | ) | |||||||
| Net written premiums | 1,729 | 1,369 | 1,205 | 1,216 | 1,488 | 4,303 | 3,776 | ||||||||||||||
| Change in unearned premiums | (200 | ) | (119 | ) | (32 | ) | 83 | (149 | ) | (351 | ) | (176 | ) | ||||||||
| Net earned premiums | 1,529 | 1,250 | 1,173 | 1,299 | 1,339 | 3,952 | 3,600 | ||||||||||||||
| Loss and LAE | 953 | 713 | 667 | 762 | 855 | 2,333 | 2,224 | ||||||||||||||
| Underwriting expense | 407 | 384 | 372 | 358 | 380 | 1,163 | 1,129 | ||||||||||||||
| Underwriting profit | $ | 169 | **** | $ | 153 | **** | $ | 134 | **** | $ | 179 | **** | $ | 104 | **** | $ | 456 | **** | $ | 247 | **** |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | $ | 3 | $ | 2 | $ | 9 | $ | — | $ | — | $ | 14 | $ | 95 | |||||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | 1 | $ | 11 | $ | (3 | ) | $ | 5 | $ | 12 | $ | 5 | ||||||
| Catastrophe loss | 31 | 10 | 20 | 20 | 36 | 61 | 71 | ||||||||||||||
| Total current accident year catastrophe losses | $ | 31 | $ | 11 | $ | 31 | $ | 17 | $ | 41 | $ | 73 | $ | 76 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | (83 | ) | $ | (68 | ) | $ | (59 | ) | $ | (32 | ) | $ | (48 | ) | $ | (210 | ) | $ | (181 | ) |
| Combined ratio: | |||||||||||||||||||||
| Loss and LAE ratio | 62.4 | % | 57.2 | % | 56.8 | % | 58.6 | % | 63.8 | % | 59.0 | % | 61.8 | % | |||||||
| Underwriting expense ratio | 26.6 | % | 30.7 | % | 31.7 | % | 27.6 | % | 28.3 | % | 29.4 | % | 31.4 | % | |||||||
| Combined ratio | **** | 89.0 | % | **** | 87.9 | % | **** | 88.5 | % | **** | 86.2 | % | **** | 92.1 | % | **** | 88.4 | % | **** | 93.2 | % |
| Specialty combined ratio excl. COVID-19 related losses,<br>catastrophe losses, and prior year loss reserve development | 92.3 | % | 92.2 | % | 91.2 | % | 87.1 | % | 93.1 | % | 91.9 | % | 93.6 | % | |||||||
| Loss and LAE components: | |||||||||||||||||||||
| Current accident year, excluding COVID-19 related and<br>catastrophe losses | 65.7 | % | 61.5 | % | 59.5 | % | 59.5 | % | 64.8 | % | 62.5 | % | 62.2 | % | |||||||
| COVID-19 related losses | 0.1 | % | 0.2 | % | 0.8 | % | 0.0 | % | 0.0 | % | 0.3 | % | 2.6 | % | |||||||
| Current accident year catastrophe losses | 2.0 | % | 0.9 | % | 1.7 | % | 1.5 | % | 2.7 | % | 1.5 | % | 2.0 | % | |||||||
| Prior accident year loss reserve development | (5.4 | %) | (5.4 | %) | (5.2 | %) | (2.4 | %) | (3.7 | %) | (5.3 | %) | (5.0 | %) | |||||||
| Loss and LAE ratio | **** | 62.4 | % | **** | 57.2 | % | **** | 56.8 | % | **** | 58.6 | % | **** | 63.8 | % | **** | 59.0 | % | **** | 61.8 | % |
Page 7
| American Financial Group, Inc. | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property and Transportation—Underwriting Results (GAAP) | |||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Gross written premiums | $ | 1,334 | $ | 851 | $ | 520 | $ | 647 | $ | 1,061 | $ | 2,705 | $ | 2,166 | |||||||
| Ceded reinsurance premiums | (561 | ) | (287 | ) | (117 | ) | (207 | ) | (426 | ) | (965 | ) | (719 | ) | |||||||
| Net written premiums | 773 | 564 | 403 | 440 | 635 | 1,740 | 1,447 | ||||||||||||||
| Change in unearned premiums | (73 | ) | (111 | ) | (9 | ) | 81 | (61 | ) | (193 | ) | (97 | ) | ||||||||
| Net earned premiums | 700 | 453 | 394 | 521 | 574 | 1,547 | 1,350 | ||||||||||||||
| Loss and LAE | 516 | 263 | 221 | 329 | 403 | 1,000 | 879 | ||||||||||||||
| Underwriting expense | 139 | 128 | 117 | 118 | 124 | 384 | 364 | ||||||||||||||
| Underwriting profit | $ | 45 | **** | $ | 62 | **** | $ | 56 | **** | $ | 74 | **** | $ | 47 | **** | $ | 163 | **** | $ | 107 | **** |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | $ | — | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 7 | |||||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | 1 | $ | 8 | $ | — | $ | — | $ | 9 | $ | — | |||||||
| Catastrophe loss | 14 | 6 | 14 | 6 | 18 | 34 | 41 | ||||||||||||||
| Total current accident year catastrophe losses | $ | 14 | $ | 7 | $ | 22 | $ | 6 | $ | 18 | $ | 43 | $ | 41 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | (18 | ) | $ | (40 | ) | $ | (43 | ) | $ | (29 | ) | $ | (26 | ) | $ | (101 | ) | $ | (78 | ) |
| Combined ratio: | |||||||||||||||||||||
| Loss and LAE ratio | 73.7 | % | 58.2 | % | 56.0 | % | 63.3 | % | 70.1 | % | 64.7 | % | 65.1 | % | |||||||
| Underwriting expense ratio | 19.8 | % | 28.4 | % | 29.6 | % | 22.5 | % | 21.8 | % | 24.9 | % | 27.0 | % | |||||||
| Combined ratio | **** | 93.5 | % | **** | 86.6 | % | **** | 85.6 | % | **** | 85.8 | % | **** | 91.9 | % | **** | 89.6 | % | **** | 92.1 | % |
| Combined ratio excl. COVID-19 related losses, catastrophe<br>losses, and prior year loss reserve development | 94.0 | % | 94.0 | % | 93.0 | % | 90.0 | % | 93.2 | % | 93.9 | % | 94.4 | % | |||||||
| Loss and LAE components: | |||||||||||||||||||||
| Current accident year, excluding COVID-19 related and<br>catastrophe losses | 74.2 | % | 65.6 | % | 63.4 | % | 67.5 | % | 71.4 | % | 69.0 | % | 67.4 | % | |||||||
| COVID-19 related losses | 0.0 | % | 0.0 | % | 0.1 | % | 0.2 | % | 0.1 | % | 0.0 | % | 0.5 | % | |||||||
| Current accident year catastrophe losses | 2.0 | % | 1.4 | % | 3.6 | % | 1.2 | % | 3.1 | % | 2.2 | % | 3.0 | % | |||||||
| Prior accident year loss reserve development | (2.5 | %) | (8.8 | %) | (11.1 | %) | (5.6 | %) | (4.5 | %) | (6.5 | %) | (5.8 | %) | |||||||
| Loss and LAE ratio | **** | 73.7 | % | **** | 58.2 | % | **** | 56.0 | % | **** | 63.3 | % | **** | 70.1 | % | **** | 64.7 | % | **** | 65.1 | % |
Page 8
| American Financial Group, Inc.<br><br><br>Specialty Casualty—Underwriting Results (GAAP)<br> <br>($ in<br>millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Gross written premiums | $ | 1,121 | $ | 897 | $ | 904 | $ | 865 | $ | 978 | $ | 2,922 | $ | 2,579 | |||||||
| Ceded reinsurance premiums | (389 | ) | (305 | ) | (316 | ) | (300 | ) | (336 | ) | (1,010 | ) | (840 | ) | |||||||
| Net written premiums | 732 | 592 | 588 | 565 | 642 | 1,912 | 1,739 | ||||||||||||||
| Change in unearned premiums | (119 | ) | (4 | ) | (17 | ) | 7 | (82 | ) | (140 | ) | (76 | ) | ||||||||
| Net earned premiums | 613 | 588 | 571 | 572 | 560 | 1,772 | 1,663 | ||||||||||||||
| Loss and LAE | 335 | 363 | 361 | 337 | 352 | 1,059 | 1,059 | ||||||||||||||
| Underwriting expense | 168 | 154 | 154 | 144 | 155 | 476 | 472 | ||||||||||||||
| Underwriting profit | $ | 110 | **** | $ | 71 | **** | $ | 56 | **** | $ | 91 | **** | $ | 53 | **** | $ | 237 | **** | $ | 132 | **** |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | 1 | — | 7 | 2 | (1 | ) | $ | 8 | $ | 58 | |||||||||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | — | $ | 1 | $ | (3 | ) | $ | 5 | $ | 1 | $ | 5 | ||||||
| Catastrophe loss | 3 | 2 | 1 | 5 | 3 | 6 | 9 | ||||||||||||||
| Total current accident year catastrophe losses | $ | 3 | $ | 2 | $ | 2 | $ | 2 | $ | 8 | $ | 7 | $ | 14 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | (56 | ) | $ | (20 | ) | $ | (9 | ) | $ | (6 | ) | $ | (16 | ) | $ | (85 | ) | $ | (91 | ) |
| Combined ratio: | |||||||||||||||||||||
| Loss and LAE ratio | 54.6 | % | 61.9 | % | 63.1 | % | 59.0 | % | 62.9 | % | 59.7 | % | 63.7 | % | |||||||
| Underwriting expense ratio | 27.4 | % | 26.0 | % | 27.1 | % | 25.0 | % | 27.8 | % | 26.9 | % | 28.4 | % | |||||||
| Combined ratio | **** | 82.0 | % | **** | 87.9 | % | **** | 90.2 | % | **** | 84.0 | % | **** | 90.7 | % | **** | 86.6 | % | **** | 92.1 | % |
| Combined ratio excl. COVID-19 related losses, catastrophe<br>losses, and prior year loss reserve development | 90.6 | % | 90.9 | % | 90.4 | % | 84.0 | % | 92.9 | % | 90.7 | % | 93.5 | % | |||||||
| Loss and LAE components: | |||||||||||||||||||||
| Current accident year, excluding COVID-19 related and<br>catastrophe losses | 63.2 | % | 64.9 | % | 63.3 | % | 59.0 | % | 65.1 | % | 63.8 | % | 65.1 | % | |||||||
| COVID-19 related losses | 0.1 | % | 0.1 | % | 1.2 | % | 0.3 | % | (0.1 | %) | 0.4 | % | 3.5 | % | |||||||
| Current accident year catastrophe losses | 0.4 | % | 0.3 | % | 0.3 | % | 0.8 | % | 0.8 | % | 0.3 | % | 0.6 | % | |||||||
| Prior accident year loss reserve development | (9.1 | %) | (3.4 | %) | (1.7 | %) | (1.1 | %) | (2.9 | %) | (4.8 | %) | (5.5 | %) | |||||||
| Loss and LAE ratio | **** | 54.6 | % | **** | 61.9 | % | **** | 63.1 | % | **** | 59.0 | % | **** | 62.9 | % | **** | 59.7 | % | **** | 63.7 | % |
Page 9
| American Financial Group, Inc.<br><br><br>Specialty Financial—Underwriting Results (GAAP)<br> <br>($ in<br>millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Gross written premiums | $ | 201 | $ | 189 | $ | 192 | $ | 195 | $ | 184 | $ | 582 | $ | 543 | |||||||
| Ceded reinsurance premiums | (36 | ) | (30 | ) | (31 | ) | (32 | ) | (31 | ) | (97 | ) | (102 | ) | |||||||
| Net written premiums | 165 | 159 | 161 | 163 | 153 | 485 | 441 | ||||||||||||||
| Change in unearned premiums | (2 | ) | (2 | ) | (4 | ) | (5 | ) | 2 | (8 | ) | 14 | |||||||||
| Net earned premiums | 163 | 157 | 157 | 158 | 155 | 477 | 455 | ||||||||||||||
| Loss and LAE | 56 | 52 | 53 | 56 | 62 | 161 | 186 | ||||||||||||||
| Underwriting expense | 81 | 84 | 79 | 82 | 80 | 244 | 239 | ||||||||||||||
| Underwriting profit | $ | 26 | **** | $ | 21 | **** | $ | 25 | **** | $ | 20 | **** | $ | 13 | **** | $ | 72 | **** | $ | 30 | **** |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | $ | 2 | $ | 2 | $ | 2 | $ | (3 | ) | $ | (1 | ) | $ | 6 | $ | 29 | |||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | — | $ | 2 | $ | — | $ | — | $ | 2 | $ | — | |||||||
| Catastrophe loss | 14 | 2 | 4 | 7 | 13 | 20 | 19 | ||||||||||||||
| Total current accident year catastrophe losses | $ | 14 | $ | 2 | $ | 6 | $ | 7 | $ | 13 | $ | 22 | $ | 19 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | (18 | ) | $ | (12 | ) | $ | (8 | ) | $ | (6 | ) | $ | (9 | ) | $ | (38 | ) | $ | (22 | ) |
| Combined ratio: | |||||||||||||||||||||
| Loss and LAE ratio | 34.2 | % | 33.0 | % | 33.8 | % | 35.6 | % | 39.9 | % | 33.7 | % | 40.8 | % | |||||||
| Underwriting expense ratio | 50.0 | % | 53.4 | % | 50.3 | % | 51.2 | % | 51.7 | % | 51.2 | % | 52.7 | % | |||||||
| Combined ratio | **** | 84.2 | % | **** | 86.4 | % | **** | 84.1 | % | **** | 86.8 | % | **** | 91.6 | % | **** | 84.9 | % | **** | 93.5 | % |
| Combined ratio excl. COVID-19 related losses, catastrophe<br>losses, and prior year loss reserve development | 86.3 | % | 90.6 | % | 85.9 | % | 87.7 | % | 89.5 | % | 87.5 | % | 87.6 | % | |||||||
| Loss and LAE components: | |||||||||||||||||||||
| Current accident year, excluding COVID-19 related and<br>catastrophe losses | 36.3 | % | 37.2 | % | 35.6 | % | 36.5 | % | 37.8 | % | 36.3 | % | 34.9 | % | |||||||
| COVID-19 related losses | 0.9 | % | 1.3 | % | 1.5 | % | (1.8 | %) | (0.8 | %) | 1.2 | % | 6.4 | % | |||||||
| Current accident year catastrophe losses | 8.2 | % | 1.8 | % | 2.1 | % | 4.5 | % | 8.6 | % | 4.1 | % | 4.3 | % | |||||||
| Prior accident year loss reserve development | (11.2 | %) | (7.3 | %) | (5.4 | %) | (3.6 | %) | (5.7 | %) | (7.9 | %) | (4.8 | %) | |||||||
| Loss and LAE ratio | **** | 34.2 | % | **** | 33.0 | % | **** | 33.8 | % | **** | 35.6 | % | **** | 39.9 | % | **** | 33.7 | % | **** | 40.8 | % |
Page 10
| American Financial Group, Inc.<br><br><br>Other Specialty—Underwriting Results (GAAP)<br> <br>($ in<br>millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Gross written premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
| Ceded reinsurance premiums | 59 | 54 | 53 | 48 | 58 | 166 | 149 | ||||||||||||||
| Net written premiums | 59 | 54 | 53 | 48 | 58 | 166 | 149 | ||||||||||||||
| Change in unearned premiums | (6 | ) | (2 | ) | (2 | ) | — | (8 | ) | (10 | ) | (17 | ) | ||||||||
| Net earned premiums | 53 | 52 | 51 | 48 | 50 | 156 | 132 | ||||||||||||||
| Loss and LAE | 46 | 35 | 32 | 40 | 38 | 113 | 100 | ||||||||||||||
| Underwriting expense | 19 | 18 | 22 | 14 | 21 | 59 | 54 | ||||||||||||||
| Underwriting profit (loss) | $ | (12 | ) | $ | (1 | ) | $ | (3 | ) | $ | (6 | ) | $ | (9 | ) | $ | (16 | ) | $ | (22 | ) |
| Included in results above: | |||||||||||||||||||||
| Current accident year COVID-19 related losses | $ | — | $ | — | $ | — | $ | 1 | $ | 1 | $ | — | $ | 1 | |||||||
| Current accident year catastrophe losses: | |||||||||||||||||||||
| Catastrophe reinstatement premium | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
| Catastrophe loss | — | — | 1 | 2 | 2 | 1 | 2 | ||||||||||||||
| Total current accident year catastrophe losses | $ | — | $ | — | $ | 1 | $ | 2 | $ | 2 | $ | 1 | $ | 2 | |||||||
| Prior year loss reserve development (favorable) / adverse | $ | 9 | $ | 4 | $ | 1 | $ | 9 | $ | 3 | $ | 14 | $ | 10 | |||||||
| Combined ratio: | |||||||||||||||||||||
| Loss and LAE ratio | 87.8 | % | 67.5 | % | 62.3 | % | 80.2 | % | 78.6 | % | 72.7 | % | 76.6 | % | |||||||
| Underwriting expense ratio | 34.7 | % | 35.7 | % | 42.3 | % | 36.7 | % | 37.0 | % | 37.5 | % | 39.1 | % | |||||||
| Combined ratio | **** | 122.5 | % | **** | 103.2 | % | **** | 104.6 | % | **** | 116.9 | % | **** | 115.6 | % | **** | 110.2 | % | **** | 115.7 | % |
| Combined ratio excl. COVID-19 related losses, catastrophe<br>losses, and prior year loss reserve development | 105.4 | % | 96.7 | % | 100.2 | % | 92.5 | % | 107.8 | % | 100.9 | % | 107.0 | % |
Page 11
| American Financial Group, Inc.<br><br><br>Discontinued Annuity Operations<br> <br>($ in millions) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended (a) | Nine Months Ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||
| Pretax Annuity historically reported as core operating (a) | $ | — | $ | 129 | $ | 166 | $ | 129 | $ | 121 | $ | 295 | $ | 230 | ||||||
| Impact of fair vaule, reinsurance accounting & unlocking | — | (55 | ) | 22 | (48 | ) | (43 | ) | (33 | ) | (140 | ) | ||||||||
| Realized gains (losses) of Annuity subs to be sold | — | 31 | 81 | 470 | 22 | 112 | (105 | ) | ||||||||||||
| Run-off life and long-term care | — | — | — | (2 | ) | (3 | ) | — | (6 | ) | ||||||||||
| Pretax earnings of businesses to be sold to Mass Mutual | $ | — | $ | 105 | $ | 269 | $ | 549 | $ | 97 | $ | 374 | $ | (21 | ) | |||||
| Less amounts included in continuing operations | — | (22 | ) | (28 | ) | (9 | ) | (3 | ) | (50 | ) | (10 | ) | |||||||
| Pretax results from discontinued operations, excluding the gain on sale of discontinued<br>operations | $ | — | $ | 83 | $ | 241 | $ | 540 | $ | 94 | $ | 324 | $ | (31 | ) | |||||
| Taxes | — | (18 | ) | (48 | ) | (113 | ) | (18 | ) | (66 | ) | 11 | ||||||||
| Net earnings from discontinued operations, excluding the gain on sale of discontinued<br>operations | $ | — | $ | 65 | $ | 193 | $ | 427 | $ | 76 | $ | 258 | $ | (20 | ) | |||||
| Gain on sale of annuity business | — | 697 | (41 | ) | — | — | 656 | — | ||||||||||||
| Net earnings (loss) from discontinued operations | $ | — | $ | 762 | **** | $ | 152 | **** | $ | 427 | **** | $ | 76 | **** | $ | 914 | **** | $ | (20 | ) |
| (a) | AFG completed the sale of its Annuity businesses on May 28, 2021. The amounts for three months ended<br>6/30/21 and nine months ended 9/30/21 only include earnings through the sale date. | |||||||||||||||||||
| --- | --- |
Page 12
| American Financial Group, Inc.<br><br><br>Consolidated Balance Sheet<br> <br>($ in millions) | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Assets: | ||||||||||||||||||
| Total cash and investments | $ | 16,387 | $ | 16,125 | $ | 13,900 | $ | 13,494 | $ | 13,685 | $ | 13,216 | ||||||
| Recoverables from reinsurers | 3,523 | 3,330 | 3,231 | 3,288 | 3,324 | 3,132 | ||||||||||||
| Prepaid reinsurance premiums | 1,028 | 865 | 755 | 768 | 862 | 733 | ||||||||||||
| Agents’ balances and premiums receivable | 1,492 | 1,423 | 1,209 | 1,229 | 1,382 | 1,363 | ||||||||||||
| Deferred policy acquisition costs | 262 | 258 | 244 | 244 | 269 | 296 | ||||||||||||
| Assets of managed investment entities | 5,130 | 5,086 | 5,102 | 4,971 | 4,717 | 4,393 | ||||||||||||
| Other receivables | 1,097 | 682 | 576 | 678 | 854 | 539 | ||||||||||||
| Assets of discontinued annuity operations | — | — | 48,139 | 47,885 | 46,947 | 46,183 | ||||||||||||
| Other assets | 847 | 835 | 865 | 977 | 1,018 | 954 | ||||||||||||
| Goodwill | 176 | 176 | 176 | 176 | 176 | 176 | ||||||||||||
| Total assets | $ | 29,942 | **** | $ | 28,780 | **** | $ | 74,197 | **** | $ | 73,710 | **** | $ | 73,234 | **** | $ | 70,985 | **** |
| Liabilities and Equity: | ||||||||||||||||||
| Unpaid losses and loss adjustment expenses | $ | 10,991 | $ | 10,498 | $ | 10,384 | $ | 10,392 | $ | 10,754 | $ | 10,321 | ||||||
| Unearned premiums | 3,415 | 3,054 | 2,821 | 2,803 | 3,015 | 2,778 | ||||||||||||
| Payable to reinsurers | 1,146 | 829 | 753 | 807 | 977 | 746 | ||||||||||||
| Liabilities of managed investment entities | 5,034 | 5,029 | 5,045 | 4,914 | 4,666 | 4,355 | ||||||||||||
| Long-term debt | 1,964 | 1,963 | 1,963 | 1,963 | 2,108 | 1,912 | ||||||||||||
| Other liabilities | 2,152 | 1,806 | 1,653 | 1,584 | 1,650 | 1,597 | ||||||||||||
| Liabilities of discontinued annuity operations | — | — | 44,893 | 44,458 | 43,724 | 43,150 | ||||||||||||
| Total liabilities | $ | 24,702 | **** | $ | 23,179 | **** | $ | 67,512 | **** | $ | 66,921 | **** | $ | 66,894 | **** | $ | 64,859 | **** |
| Shareholders’ equity: | ||||||||||||||||||
| Common stock | $ | 85 | $ | 85 | $ | 85 | $ | 86 | $ | 87 | $ | 89 | ||||||
| Capital surplus | 1,315 | 1,303 | 1,279 | 1,281 | 1,283 | 1,299 | ||||||||||||
| Retained earnings | 3,680 | 4,023 | 4,354 | 4,149 | 3,737 | 3,685 | ||||||||||||
| Unrealized gains—fixed maturities | 178 | 205 | 963 | 1,255 | 1,212 | 1,030 | ||||||||||||
| Unrealized gains (losses)—fixed maturity-related cash flow hedges | — | — | 27 | 41 | 41 | 47 | ||||||||||||
| Other comprehensive income, net of tax | (18 | ) | (15 | ) | (23 | ) | (23 | ) | (20 | ) | (24 | ) | ||||||
| Total shareholders’ equity | **** | 5,240 | **** | **** | 5,601 | **** | **** | 6,685 | **** | **** | 6,789 | **** | **** | 6,340 | **** | **** | 6,126 | **** |
| Total liabilities and equity | $ | 29,942 | **** | $ | 28,780 | **** | $ | 74,197 | **** | $ | 73,710 | **** | $ | 73,234 | **** | $ | 70,985 | **** |
Page 13
| American Financial Group, Inc.<br><br><br>Book Value Per Share and Price / Book Summary<br> <br>(in<br>millions, except per share information) | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shareholders’ equity | $ | 5,240 | **** | $ | 5,601 | **** | $ | 6,685 | **** | $ | 6,789 | **** | $ | 6,340 | **** | $ | 6,126 | **** |
| Unrealized (gains) related to fixed maturities | (178 | ) | (205 | ) | (990 | ) | (1,296 | ) | (1,253 | ) | (1,077 | ) | ||||||
| Adjusted shareholders’ equity | **** | 5,062 | **** | **** | 5,396 | **** | **** | 5,695 | **** | **** | 5,493 | **** | **** | 5,087 | **** | **** | 5,049 | **** |
| Goodwill from continuing and discontinued operations | (176 | ) | (176 | ) | (207 | ) | (207 | ) | (207 | ) | (207 | ) | ||||||
| Intangibles | (29 | ) | (30 | ) | (31 | ) | (34 | ) | (34 | ) | (37 | ) | ||||||
| Tangible adjusted shareholders’ equity | $ | 4,857 | **** | $ | 5,190 | **** | $ | 5,457 | **** | $ | 5,252 | **** | $ | 4,846 | **** | $ | 4,805 | **** |
| Common shares outstanding | 84.795 | 84.714 | 85.126 | 86.345 | 87.267 | 88.659 | ||||||||||||
| Book value per share: | ||||||||||||||||||
| Book value per share | $ | 61.80 | **** | $ | 66.12 | **** | $ | 78.53 | **** | $ | 78.62 | **** | $ | 72.65 | **** | $ | 69.10 | **** |
| Adjusted (a) | **** | 59.70 | **** | **** | 63.70 | **** | **** | 66.89 | **** | **** | 63.61 | **** | **** | 58.29 | **** | **** | 56.95 | **** |
| Tangible, adjusted (b) | **** | 57.28 | **** | **** | 61.27 | **** | **** | 64.10 | **** | **** | 60.82 | **** | **** | 55.53 | **** | **** | 54.20 | **** |
| Market capitalization | ||||||||||||||||||
| AFG’s closing common share price | $ | 125.83 | $ | 124.72 | $ | 114.10 | $ | 87.62 | $ | 66.98 | $ | 63.46 | ||||||
| Market capitalization | $ | 10,670 | $ | 10,566 | $ | 9,713 | $ | 7,566 | $ | 5,845 | $ | 5,626 | ||||||
| Price / Adjusted book value ratio | 2.11 | 1.96 | 1.71 | 1.38 | 1.15 | 1.11 | ||||||||||||
| (a) | Excludes unrealized gains related to fixed maturity investments. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| (b) | Excludes unrealized gains related to fixed maturity investments, goodwill and intangibles.<br> | |||||||||||||||||
| --- | --- |
Page 14
| American Financial Group, Inc.<br><br><br>Capitalization<br> <br>($ in millions) | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| AFG senior obligations | $ | 1,318 | $ | 1,318 | $ | 1,318 | $ | 1,318 | $ | 1,318 | $ | 1,318 | ||||||
| Borrowings drawn under credit facility | — | — | — | — | — | — | ||||||||||||
| Debt excluding subordinated debt | $ | 1,318 | **** | $ | 1,318 | **** | $ | 1,318 | **** | $ | 1,318 | **** | $ | 1,318 | **** | $ | 1,318 | **** |
| AFG subordinated debentures | 675 | 675 | 675 | 675 | 825 | 625 | ||||||||||||
| Total principal amount of long-term debt | $ | 1,993 | **** | $ | 1,993 | **** | $ | 1,993 | **** | $ | 1,993 | **** | $ | 2,143 | **** | $ | 1,943 | **** |
| Shareholders’ equity | 5,240 | 5,601 | 6,685 | 6,789 | 6,340 | 6,126 | ||||||||||||
| Noncontrolling interests (including redeemable NCI) | — | — | — | — | — | — | ||||||||||||
| Less: | ||||||||||||||||||
| Unrealized (gains) related to fixed maturity investments | (178 | ) | (205 | ) | (990 | ) | (1,296 | ) | (1,253 | ) | (1,077 | ) | ||||||
| Total adjusted capital | $ | 7,055 | **** | $ | 7,389 | **** | $ | 7,688 | **** | $ | 7,486 | **** | $ | 7,230 | **** | $ | 6,992 | **** |
| Ratio of debt to total adjusted capital: | ||||||||||||||||||
| Including subordinated debt | **** | 28.2 | % | **** | 27.0 | % | **** | 25.9 | % | **** | 26.6 | % | **** | 29.6 | % | **** | 27.8 | % |
| Excluding subordinated debt | **** | 18.7 | % | **** | 17.8 | % | **** | 17.1 | % | **** | 17.6 | % | **** | 18.2 | % | **** | 18.9 | % |
Page 15
| American Financial Group, Inc.<br><br><br>Additional Supplemental Information<br> <br>($ in<br>millions) | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine MonthsEnded | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||
| Property and Casualty Insurance | ||||||||||||||||
| Paid Losses (GAAP) | $ | 678 | $ | 667 | $ | 674 | $ | 758 | $ | 646 | $ | 2,019 | $ | 1,998 | ||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 6/30/20 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| GAAP Equity (excluding AOCI) | ||||||||||||||||
| Property and Casualty Insurance | $ | 4,934 | $ | 4,779 | $ | 4,571 | $ | 4,458 | $ | 4,154 | $ | 3,945 | ||||
| Annuity | — | — | 3,012 | 2,893 | 2,659 | 2,579 | ||||||||||
| Parent and other subsidiaries | 146 | 632 | (1,865 | ) | (1,835 | ) | (1,706 | ) | (1,451 | ) | ||||||
| AFG GAAP Equity (excluding AOCI) | $ | 5,080 | $ | 5,411 | $ | 5,718 | $ | 5,516 | $ | 5,107 | $ | 5,073 | ||||
| Allowable dividends without regulatory approval | ||||||||||||||||
| Property and Casualty Insurance | $ | 416 | $ | 416 | $ | 416 | $ | 416 | $ | 565 | $ | 565 | ||||
| Annuity and Run-off | — | — | 289 | 289 | 287 | 287 | ||||||||||
| Total | $ | 416 | $ | 416 | $ | 705 | **** | $ | 705 | **** | $ | 852 | **** | $ | 852 | **** |
Page 16
| American Financial Group, Inc.<br> <br>TotalCash and Investments<br> <br>($ in millions) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Carrying Value—September 30, 2021 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Property andCasualtyInsurance | Parent &Other | ConsolidateCLOs | Total AFGConsolidated | % ofInvestmentPortfolio | ||||||||
| Total cash and investments: | ||||||||||||
| Cash and cash equivalents | $ | 1,469 | $ | 1,364 | $ | — | $ | 2,833 | 17 | % | ||
| Fixed maturities—Available for sale | 9,147 | 1,280 | — | 10,427 | 64 | % | ||||||
| Fixed maturities—Trading | 29 | — | — | 29 | 0 | % | ||||||
| Equity securities—common stocks | 484 | 79 | — | 563 | 3 | % | ||||||
| Equity securities—perpetual preferred | 430 | — | — | 430 | 3 | % | ||||||
| Investments accounted for using the equity method | 1,407 | — | — | 1,407 | 9 | % | ||||||
| Mortgage loans | 537 | — | — | 537 | 3 | % | ||||||
| Real estate and other investments | 152 | 105 | (96 | ) | 161 | 1 | % | |||||
| Total cash and investments | $ | 13,655 | $ | 2,828 | $ | (96 | ) | $ | 16,387 | **** | 100 | % |
| Carrying Value—December 31, 2020 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Property andCasualtyInsurance | Parent &Other | ConsolidateCLOs | Total AFGConsolidated | % ofInvestmentPortfolio | ||||||||
| Total cash and investments: | ||||||||||||
| Cash and cash equivalents | $ | 1,408 | $ | 257 | $ | — | $ | 1,665 | 12 | % | ||
| Fixed maturities—Available for sale | 9,076 | 8 | — | 9,084 | 67 | % | ||||||
| Fixed maturities—Trading | 24 | — | — | 24 | 0 | % | ||||||
| Equity securities—common stocks | 438 | 72 | — | 510 | 4 | % | ||||||
| Equity securities—perpetual preferred | 379 | — | — | 379 | 3 | % | ||||||
| Investments accounted for using the equity method | 806 | 429 | — | 1,235 | 9 | % | ||||||
| Mortgage loans | 377 | — | — | 377 | 3 | % | ||||||
| Real estate and other investments | 125 | 151 | (56 | ) | 220 | 2 | % | |||||
| Total cash and investments | $ | 12,633 | $ | 917 | $ | (56 | ) | $ | 13,494 | **** | 100 | % |
Page 17
| American Financial Group, Inc.<br> <br>NetInvestment Income From Continuing Operations<br> <br>($ in millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Property and Casualty Insurance: | |||||||||||||||||||||
| Gross Investment Income | |||||||||||||||||||||
| Fixed maturities—Available for sale | $ | 70 | $ | 70 | $ | 72 | $ | 71 | $ | 72 | $ | 212 | $ | 228 | |||||||
| Fixed maturities—Trading | 1 | — | — | — | — | 1 | 1 | ||||||||||||||
| Equity securities—dividends | 6 | 6 | 8 | 7 | 8 | 20 | 26 | ||||||||||||||
| Equity securities—MTM | 6 | 5 | 23 | 8 | (3 | ) | 34 | 2 | |||||||||||||
| Equity in investees | 73 | 51 | 49 | 27 | 27 | 173 | 23 | ||||||||||||||
| AFG managed CLOs | 5 | 7 | 5 | 6 | 4 | 17 | (7 | ) | |||||||||||||
| Other investments (a) | 8 | 6 | 4 | 4 | 5 | 18 | 14 | ||||||||||||||
| Gross investment income | **** | 169 | **** | **** | 145 | **** | **** | 161 | **** | **** | 123 | **** | **** | 113 | **** | **** | 475 | **** | **** | 287 | **** |
| Investment expenses | (4 | ) | (2 | ) | (2 | ) | (1 | ) | (2 | ) | (8 | ) | (5 | ) | |||||||
| Total net investment income | $ | 165 | **** | $ | 143 | **** | $ | 159 | **** | $ | 122 | **** | $ | 111 | **** | $ | 467 | **** | $ | 282 | **** |
| Average cash and investments (b) | $ | 13,194 | **** | $ | 12,630 | **** | $ | 12,573 | **** | $ | 12,135 | **** | $ | 11,764 | **** | $ | 12,763 | **** | $ | 11,611 | **** |
| Average yield (c) | **** | 5.00 | % | **** | 4.53 | % | **** | 5.06 | % | **** | 4.02 | % | **** | 3.77 | % | **** | 4.88 | % | **** | 3.24 | % |
| AFG consolidated net investment income: | |||||||||||||||||||||
| Property & Casualty core | $ | 165 | $ | 143 | $ | 159 | $ | 122 | $ | 111 | $ | 467 | $ | 282 | |||||||
| Neon exited lines non-core | — | — | — | — | 1 | — | (5 | ) | |||||||||||||
| Equity in Investees (d) | — | 20 | 29 | 19 | 9 | 49 | 30 | ||||||||||||||
| Other Investments (d) | — | 2 | — | 1 | 1 | 2 | (1 | ) | |||||||||||||
| Parent & other | 9 | 6 | 5 | 11 | 4 | 20 | 1 | ||||||||||||||
| Consolidate CLOs | (5 | ) | (7 | ) | (5 | ) | (6 | ) | (4 | ) | (17 | ) | 7 | ||||||||
| Total net investment income | $ | 169 | **** | $ | 164 | **** | $ | 188 | **** | $ | 147 | **** | $ | 122 | **** | $ | 521 | **** | $ | 314 | **** |
| (a) | Includes income from mortgage loans, real estate, policy loans, short-term investments, and cash equivalents.<br> | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (b) | Average cash and investments is the average of the beginning and ending quarter balances, or the average of the<br>five quarters balances. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (c) | Average yield is calculated by dividing investment income for the quarter by the average cash and investment<br>balance over the quarter. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (d) | Investment income on real estate-related assets retained by AFG from the sale of the annuity business.<br> | ||||||||||||||||||||
| --- | --- |
Page 18
| American Financial Group, Inc.<br><br><br>Alternative Investments—Continuing Operations<br> <br>($ in<br>millions) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||||||
| Property and Casualty Insurance: | ||||||||||||||||||||
| Net Investment Income | ||||||||||||||||||||
| Equity securities MTM through investment income (a) | $ | 6 | $ | 5 | $ | 23 | $ | 8 | (3) | $ | 34 | $ | 2 | |||||||
| Investments accounted for using the equity method (b) | 73 | 51 | 49 | 27 | 173 | 23 | ||||||||||||||
| AFG managed CLOs (eliminated in consolidation) | 5 | 7 | 5 | 6 | 17 | (7 | ) | |||||||||||||
| Total Property & Casualty | $ | 84 | **** | $ | 63 | **** | $ | 77 | **** | $ | 41 | **** | **** | $ | 224 | **** | $ | 18 | **** | |
| Investments | ||||||||||||||||||||
| Equity securities MTM through investment income (a) | $ | 195 | $ | 172 | $ | 159 | $ | 129 | $ | 195 | $ | 109 | ||||||||
| Investments accounted for using the equity method (b) | 1,407 | 1,378 | 861 | 806 | 1,407 | 778 | ||||||||||||||
| AFG managed CLOs (eliminated in consolidation) | 96 | 57 | 57 | 57 | 96 | 46 | ||||||||||||||
| Total Property & Casualty | $ | 1,698 | **** | $ | 1,607 | **** | $ | 1,077 | **** | $ | 992 | **** | **** | $ | 1,698 | **** | $ | 933 | **** | |
| Annualized Return—Property & Casualty | **** | 20.3 | % | **** | 22.9 | % | **** | 29.8 | % | **** | 17.0 | % | % | **** | 24.4 | % | **** | 2.7 | % | |
| Continuing Operations: | ||||||||||||||||||||
| Net Investment Income | ||||||||||||||||||||
| Equity securities MTM through investment income (a) | $ | 6 | $ | 5 | $ | 23 | $ | 8 | (3) | $ | 34 | $ | 2 | |||||||
| Investments accounted for using the equity method (b)(c) | 73 | 71 | 78 | 46 | 222 | 53 | ||||||||||||||
| AFG managed CLOs (eliminated in consolidation) | 5 | 7 | 5 | 6 | 17 | (7 | ) | |||||||||||||
| Total Continuing operations | $ | 84 | **** | $ | 83 | **** | $ | 106 | **** | $ | 60 | **** | **** | $ | 273 | **** | $ | 48 | **** | |
| Investments | ||||||||||||||||||||
| Equity securities MTM through investment income (a) | $ | 195 | $ | 172 | $ | 159 | $ | 129 | $ | 195 | $ | 109 | ||||||||
| Investments accounted for using the equity method (b) | 1,407 | 1,378 | 1,324 | 1,235 | 1,407 | 1,194 | ||||||||||||||
| AFG managed CLOs (eliminated in consolidation) | 96 | 57 | 57 | 57 | 96 | 46 | ||||||||||||||
| Total Continuing operations | $ | 1,698 | **** | $ | 1,607 | **** | $ | 1,540 | **** | $ | 1,421 | **** | **** | $ | 1,698 | **** | $ | 1,349 | **** | |
| Annualized Return—Continuing operations | **** | 20.3 | % | **** | 21.1 | % | **** | 28.6 | % | **** | 17.3 | % | % | **** | 23.2 | % | **** | 5.1 | % |
All values are in US Dollars.
| (a) | AFG carries the small portion of its equity securities previously classified as “trading” and<br>investments in limited partnerships and similar investments that aren’t accounted for using the equity method at fair value through net investment income. |
|---|---|
| (b) | The majority of AFG’s investments accounted for using the equity method mark their underlying assets to<br>market through net income. |
| --- | --- |
| (c) | Includes investment income on real estate-related partnerships retained by AFG from the sale of the annuity<br>business. |
| --- | --- |
Page 19
| American Financial Group, Inc.<br><br><br>Fixed Maturities—By Security Type—AFG Consolidated<br><br><br>($ in millions) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2021 | Book Value (c) | Fair Value | UnrealizedGain (Loss) | % ofFair Value | % ofInvestmentPortfolio | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| US Government and government agencies | $ | 216 | $ | 218 | $ | 2 | 2 | % | 1 | % | |||
| States, municipalities and political subdivisions | 1,849 | 1,926 | 77 | 19 | % | 12 | % | ||||||
| Foreign government | 241 | 242 | 1 | 2 | % | 1 | % | ||||||
| Residential mortgage-backed securities | 704 | 754 | 50 | 7 | % | 5 | % | ||||||
| Commercial mortgage-backed securities | 110 | 113 | 3 | 1 | % | 1 | % | ||||||
| Collateralized loan obligations | 1,826 | 1,829 | 3 | 18 | % | 11 | % | ||||||
| Other asset-backed securities | 2,625 | 2,645 | 20 | 25 | % | 16 | % | ||||||
| Corporate and other bonds | 2,660 | 2,729 | 69 | 26 | % | 17 | % | ||||||
| Total AFG consolidated | $ | 10,231 | **** | $ | 10,456 | $ | 225 | **** | 100 | % | **** | 64 | % |
| Annualized yield on available for sale fixed maturities: | **** | ||||||||||||
| Excluding investment expense (a) | 2.95 | % | |||||||||||
| Net of investment expense (a) | 2.84 | % | |||||||||||
| Tax equivalent, net of investment expense (b) | 2.98 | % | |||||||||||
| Approximate average life and duration: | |||||||||||||
| Approximate average life | 3.5 years | ||||||||||||
| Approximate duration | 2 years | ||||||||||||
| December 31, 2020 | Book Value (c) | Fair Value | UnrealizedGain (Loss) | % ofFair Value | % ofInvestmentPortfolio | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| US Government and government agencies | $ | 192 | $ | 198 | $ | 6 | 2 | % | 1 | % | |||
| States, municipalities and political subdivisions | 2,196 | 2,312 | 116 | 25 | % | 17 | % | ||||||
| Foreign government | 193 | 197 | 4 | 2 | % | 1 | % | ||||||
| Residential mortgage-backed securities | 859 | 915 | 56 | 10 | % | 7 | % | ||||||
| Commercial mortgage-backed securities | 89 | 92 | 3 | 1 | % | 1 | % | ||||||
| Collateralized loan obligations | 1,062 | 1,062 | — | 12 | % | 8 | % | ||||||
| Other asset-backed securities | 2,033 | 2,047 | 14 | 23 | % | 15 | % | ||||||
| Corporate and other bonds | 2,200 | 2,285 | 85 | 25 | % | 17 | % | ||||||
| Total AFG consolidated | $ | 8,824 | **** | $ | 9,108 | $ | 284 | **** | 100 | % | **** | 67 | % |
| Annualized yield on available for sale fixed maturities: | **** | ||||||||||||
| Excluding investment expense (a) | 3.32 | % | |||||||||||
| Net of investment expense (a) | 3.26 | % | |||||||||||
| Tax equivalent, net of investment expense (b) | 3.40 | % | |||||||||||
| Approximate average life and duration: | |||||||||||||
| Approximate average life | 4 years | ||||||||||||
| Approximate duration | 3 years | ||||||||||||
| (a) | Annualized yield is calculated by dividing investment income for the quarter by the average cost over the<br>quarter. Average cost is the average of the beginning and ending quarter asset balances. | ||||||||||||
| --- | --- | ||||||||||||
| (b) | Adjusts the yield on tax-exempt bonds to the fully taxable equivalent<br>yield. | ||||||||||||
| --- | --- | ||||||||||||
| (c) | Book Value is amortized cost, net of allowance for expected credit losses. <br> | ||||||||||||
| --- | --- |
Page 20
| Appendix A<br> <br>American Financial Group,Inc.<br> <br>Fixed Maturities by Credit Rating & NAIC Designation by Type<br><br><br>9/30/2021<br> <br>($ in millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value by Type | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| By Credit Rating (a) | US Gov | Munis | Frgn Gov | RMBS | CMBS | CLOs | ABS | Corp/Oth | Total | % Total | |||||||||||
| Investment grade | |||||||||||||||||||||
| AAA | $ | 218 | $ | 765 | $ | 228 | $ | 423 | $ | 82 | $ | 1,584 | $ | 1,290 | $ | 51 | $ | 4,641 | 44 | % | |
| AA | — | 1,076 | — | 11 | 8 | 177 | 392 | 189 | 1,853 | 18 | % | ||||||||||
| A | — | 65 | — | 22 | 1 | 57 | 457 | 716 | 1,318 | 13 | % | ||||||||||
| BBB | — | 9 | 4 | 8 | 14 | 10 | 277 | 1,058 | 1,380 | 13 | % | ||||||||||
| Subtotal—Investment grade | 218 | 1,915 | 232 | 464 | 105 | 1,828 | 2,416 | 2,014 | 9,192 | 88 | % | ||||||||||
| BB | — | — | — | 4 | 8 | — | 4 | 143 | 159 | 2 | % | ||||||||||
| B | — | — | — | 18 | — | — | 11 | 11 | 40 | 0 | % | ||||||||||
| CCC, CC, C | — | — | — | 149 | — | — | — | 9 | 158 | 2 | % | ||||||||||
| D | — | — | — | 19 | — | — | — | 1 | 20 | 0 | % | ||||||||||
| Subtotal—Non-Investment grade | — | — | — | 190 | 8 | — | 15 | 164 | 377 | 4 | % | ||||||||||
| Not Rated (b) | — | 11 | 10 | 100 | — | 1 | 214 | 551 | 887 | 8 | % | ||||||||||
| Total | $ | 218 | $ | 1,926 | $ | 242 | $ | 754 | $ | 113 | $ | 1,829 | $ | 2,645 | $ | 2,729 | $ | 10,456 | **** | 100 | % |
| Fair Value by type | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | US Gov | Munis | Frgn gov | RMBS | CMBS | CLOs | ABS | Corp/Oth | Total | % Total | |||||||||||
| 1 | $ | 218 | $ | 1,916 | $ | 216 | $ | 684 | $ | 96 | $ | 1,254 | $ | 1,899 | $ | 1,232 | $ | 7,515 | 82 | % | |
| 2 | — | 9 | — | 2 | 2 | 9 | 276 | 1,093 | 1,391 | 15 | % | ||||||||||
| Subtotal | 218 | 1,925 | 216 | 686 | 98 | 1,263 | 2,175 | 2,325 | 8,906 | 97 | % | ||||||||||
| 3 | — | — | — | 3 | 8 | — | 4 | 149 | 164 | 2 | % | ||||||||||
| 4 | — | — | — | 1 | — | — | 11 | 21 | 33 | 0 | % | ||||||||||
| 5 | — | — | — | 7 | — | 1 | 2 | 26 | 36 | 1 | % | ||||||||||
| 6 | — | — | — | 2 | — | — | — | 1 | 3 | 0 | % | ||||||||||
| Subtotal | — | — | — | 13 | 8 | 1 | 17 | 197 | 236 | 3 | % | ||||||||||
| Total insurance companies | $ | 218 | $ | 1,925 | $ | 216 | $ | 699 | $ | 106 | $ | 1,264 | $ | 2,192 | $ | 2,522 | $ | 9,142 | **** | 100 | % |
| Total non-insurance (c) | — | 1 | 26 | 55 | 7 | 565 | 453 | 207 | 1,314 | ||||||||||||
| Total | $ | 218 | $ | 1,926 | $ | 242 | $ | 754 | $ | 113 | $ | 1,829 | $ | 2,645 | $ | 2,729 | $ | 10,456 | |||
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (b) | For ABS, 85% are NAIC 1 and 14% are held by non-insurance companies.<br> | ||||||||||||||||||||
| --- | --- |
For Corp/Oth, 53% are NAIC 1, 5% NAIC 2 and 37% are held by non-insurance companies.
For Total, 65% are NAIC 1, 3% NAIC 2 and 27% are held by non-insurance companies.
| (c) | 80% are investment grade rated. |
|---|
Page 21
| Appendix B<br> <br>American Financial Group,Inc.<br> <br>Fixed Maturities by Credit Rating & NAIC Designation by Type<br><br><br>12/31/2020<br> <br>($ in millions) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value by Type | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| By Credit Rating (a) | US Gov | Munis | Frgn Gov | RMBS | CMBS | CLOs | ABS | Corp/Oth | Total | % Total | |||||||||||
| Investment grade | |||||||||||||||||||||
| AAA | $ | 198 | $ | 922 | $ | 179 | $ | 492 | $ | 62 | $ | 801 | $ | 889 | $ | 41 | $ | 3,584 | 39 | % | |
| AA | — | 1,271 | — | 20 | 8 | 179 | 407 | 163 | 2,048 | 22 | % | ||||||||||
| A | — | 97 | — | 31 | 1 | 72 | 330 | 620 | 1,151 | 13 | % | ||||||||||
| BBB | — | 9 | 2 | 10 | 14 | 9 | 208 | 887 | 1,139 | 13 | % | ||||||||||
| Subtotal—Investment grade | 198 | 2,299 | 181 | 553 | 85 | 1,061 | 1,834 | 1,711 | 7,922 | 87 | % | ||||||||||
| BB | — | — | — | 10 | 6 | — | 2 | 95 | 113 | 1 | % | ||||||||||
| B | — | — | — | 24 | — | — | 10 | 30 | 64 | 1 | % | ||||||||||
| CCC, CC, C | — | — | — | 170 | 1 | — | — | 13 | 184 | 2 | % | ||||||||||
| D | — | — | — | 38 | — | — | — | — | 38 | 0 | % | ||||||||||
| Subtotal—Non-Investment grade | — | — | — | 242 | 7 | — | 12 | 138 | 399 | 4 | % | ||||||||||
| Not Rated (b) | — | 13 | 16 | 120 | — | 1 | 201 | 436 | 787 | 9 | % | ||||||||||
| Total | $ | 198 | $ | 2,312 | $ | 197 | $ | 915 | $ | 92 | $ | 1,062 | $ | 2,047 | $ | 2,285 | $ | 9,108 | **** | 100 | % |
| Fair Value by type | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | US Gov | Munis | Frgn gov | RMBS | CMBS | CLOs | ABS | Corp/Oth | Total | % Total | |||||||||||
| 1 | $ | 198 | $ | 2,302 | $ | 176 | $ | 883 | $ | 83 | $ | 1,051 | $ | 1,823 | $ | 1,203 | $ | 7,719 | 85 | % | |
| 2 | — | 9 | — | 2 | 2 | 9 | 208 | 907 | 1,137 | 12 | % | ||||||||||
| Subtotal | 198 | 2,311 | 176 | 885 | 85 | 1,060 | 2,031 | 2,110 | 8,856 | 97 | % | ||||||||||
| 3 | — | — | — | 7 | 7 | — | 2 | 95 | 111 | 1 | % | ||||||||||
| 4 | — | — | — | 2 | — | — | 10 | 49 | 61 | 1 | % | ||||||||||
| 5 | — | — | — | 10 | — | 1 | 2 | 28 | 41 | 1 | % | ||||||||||
| 6 | — | — | — | 2 | — | — | — | 1 | 3 | 0 | % | ||||||||||
| Subtotal | — | — | — | 21 | 7 | 1 | 14 | 173 | 216 | 3 | % | ||||||||||
| No designation (c) | — | 1 | 21 | 9 | — | 1 | 2 | 2 | 36 | 0 | % | ||||||||||
| Total | $ | 198 | $ | 2,312 | $ | 197 | $ | 915 | $ | 92 | $ | 1,062 | $ | 2,047 | $ | 2,285 | $ | 9,108 | **** | 100 | % |
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||
| --- | --- | ||||||||||||||||||||
| (b) | For ABS, 98% are NAIC 1. | ||||||||||||||||||||
| --- | --- |
For Corp/Oth, 87% are NAIC 1, 4% NAIC 2, 2% NAIC 3, 4% NAIC 4, 3% NAIC 5.
For Total, 90% are NAIC 1, 2% NAIC 2, 2% NAIC 3, 2% NAIC 4, 3% NAIC 5.
| (c) | Primarily relates to securities held by non-insurance companies.<br> |
|---|
Page 22
| Appendix G<br> <br>American Financial Group,Inc.<br> <br>Real Estate-Related Investments<br><br><br>9/30/2021<br> <br>($ in millions) |
|---|
Investments accounted for using equity method (Real Estate Funds/Investments) (a)
| Investment Type | Book Value | % ofBook Value | Occupancy (b) | Collection Rate (c) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Multi-family | $ | 899 | 88 | % | 96 | % | 98 | % | |||
| Fund Investments | 42 | 4 | % | — | — | ||||||
| Student Housing | 25 | 2 | % | 94 | % | 98 | % | ||||
| QOZ Fund—Development | 19 | 2 | % | — | — | ||||||
| Land Development | 16 | 2 | % | — | — | ||||||
| Office | 15 | 1 | % | 81 | % | 100 | % | ||||
| Hospitality | 8 | 1 | % | — | — | ||||||
| Total | $ | 1,024 | **** | 100 | % |
Real Estate
| Property Type | Book Value | % ofBook Value | Debt | ||||
|---|---|---|---|---|---|---|---|
| Resort & Marina | $ | 53 | 40 | % | $ | — | |
| Marina | 38 | 29 | % | — | |||
| Hotel | 21 | 16 | % | — | |||
| Office Building | 16 | 12 | % | — | |||
| Land | 5 | 3 | % | — | |||
| Total | $ | 133 | **** | 100 | % | $ | — |
Mortgage Loans
| Property Type | BookValue | % ofBook Value | Loan ToValue (d) | |||||
|---|---|---|---|---|---|---|---|---|
| Multifamily | 312 | 58 | % | 68 | % | |||
| Hospitality | 146 | 27 | % | 54 | % | |||
| Office | 72 | 14 | % | 72 | % | |||
| Retail | 7 | 1 | % | 56 | % | |||
| Total | $ | 537 | **** | 100 | % | **** | 64 | % |
Currently, no loans are receiving interest deferral through forbearance agreements.
| (a) | Total investments accounted for using the equity method is $1.4 billion, the amounts presented in this<br>table only relate to real estate funds/investments. |
|---|---|
| (b) | Occupancy as of 9/30/21 |
| --- | --- |
| (c) | Collections for July—September |
| --- | --- |
| (d) | Based on most recent property appraisals, the vast majority of which are prior to March 2020.<br> |
| --- | --- |
Page 27
| Appendix C<br> <br>American Financial Group,Inc.<br> <br>Corporate Securities by Credit Rating & NAIC Designation by Industry<br><br><br>9/30/2021<br> <br>($ in millions) | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value By Industry | |||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Credit Rating (a) | OtherFinancials | AssetManagers | Banking | Technology | Insurance | Autos | Consumer | REITs | Healthcare | Energy | CapitalGoods | Communications | Other | Total | % Total | ||||||||||||||||
| Investment Grade | |||||||||||||||||||||||||||||||
| AAA | $ | — | $ | — | $ | — | $ | 16 | $ | — | $ | — | $ | 10 | $ | — | $ | 10 | $ | — | $ | — | $ | 13 | $ | 2 | $ | 51 | 2 | % | |
| AA | 12 | — | 27 | 48 | 35 | — | 17 | — | 12 | 36 | — | — | 2 | 189 | 7 | % | |||||||||||||||
| A | 95 | 47 | 116 | 27 | 117 | 56 | 44 | 48 | 22 | 23 | 61 | 25 | 35 | 716 | 26 | % | |||||||||||||||
| BBB | 95 | 289 | 204 | 78 | 25 | 88 | 34 | 63 | 41 | 31 | 13 | 34 | 63 | 1,058 | 39 | % | |||||||||||||||
| Subtotal | 202 | 336 | 347 | 169 | 177 | 144 | 105 | 111 | 85 | 90 | 74 | 72 | 102 | 2,014 | 74 | % | |||||||||||||||
| BB | 4 | 5 | — | 34 | 7 | 12 | 36 | — | 10 | 9 | 4 | — | 22 | 143 | 5 | % | |||||||||||||||
| B | — | — | — | 2 | — | 4 | 3 | — | 2 | — | — | — | — | 11 | 1 | % | |||||||||||||||
| CCC, CC, C | — | — | — | 2 | — | — | 2 | — | — | — | — | — | 5 | 9 | 0 | % | |||||||||||||||
| D | — | — | — | — | — | — | — | — | — | — | — | — | 1 | 1 | 0 | % | |||||||||||||||
| Subtotal | 4 | 5 | — | 38 | 7 | 16 | 41 | — | 12 | 9 | 4 | — | 28 | 164 | 6 | % | |||||||||||||||
| Not Rated (b) | 470 | 20 | — | 1 | 10 | — | 14 | 6 | 7 | — | 2 | — | 21 | 551 | 20 | % | |||||||||||||||
| Total | $ | 676 | $ | 361 | $ | 347 | $ | 208 | $ | 194 | $ | 160 | $ | 160 | $ | 117 | $ | 104 | $ | 99 | $ | 80 | $ | 72 | $ | 151 | $ | 2,729 | **** | 100 | % |
| Fair Value By Industry | |||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | OtherFinancials | AssetManagers | Banking | Technology | Insurance | Autos | Consumer | REITs | Healthcare | Energy | CapitalGoods | Communications | Other | Total | % Total | ||||||||||||||||
| 1 | $ | 372 | $ | 34 | $ | 143 | $ | 90 | $ | 162 | $ | 56 | $ | 74 | $ | 48 | $ | 45 | $ | 59 | $ | 61 | $ | 38 | $ | 50 | $ | 1,232 | 49 | % | |
| 2 | 96 | 321 | 204 | 79 | 26 | 89 | 36 | 56 | 41 | 31 | 15 | 34 | 65 | 1,093 | 43 | % | |||||||||||||||
| Subtotal | 468 | 355 | 347 | 169 | 188 | 145 | 110 | 104 | 86 | 90 | 76 | 72 | 115 | 2,325 | 92 | % | |||||||||||||||
| 3 | 4 | 6 | — | 33 | 6 | 11 | 38 | 6 | 9 | 9 | 4 | — | 23 | 149 | 6 | % | |||||||||||||||
| 4 | — | — | — | 2 | — | 4 | 5 | 7 | 3 | — | — | — | — | 21 | 1 | % | |||||||||||||||
| 5 | — | — | — | 4 | — | — | 7 | — | 6 | — | — | — | 9 | 26 | 1 | % | |||||||||||||||
| 6 | — | — | — | — | — | — | — | — | — | — | — | — | 1 | 1 | 0 | % | |||||||||||||||
| Subtotal | 4 | 6 | — | 39 | 6 | 15 | 50 | 13 | 18 | 9 | 4 | — | 33 | 197 | 8 | % | |||||||||||||||
| Total insurance companies | $ | 472 | $ | 361 | $ | 347 | $ | 208 | $ | 194 | $ | 160 | $ | 160 | $ | 117 | $ | 104 | $ | 99 | $ | 80 | $ | 72 | $ | 148 | $ | 2,522 | **** | 100 | % |
| Total non-insurance | 204 | — | — | — | — | — | — | — | — | — | — | — | 3 | 207 | |||||||||||||||||
| Total | $ | 676 | $ | 361 | $ | 347 | $ | 208 | $ | 194 | $ | 160 | $ | 160 | $ | 117 | $ | 104 | $ | 99 | $ | 80 | $ | 72 | $ | 151 | $ | 2,729 | |||
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||||
| (b) | For Other Financials, 56% are NAIC 1 and 43% are held by non-insurance<br>companies. | ||||||||||||||||||||||||||||||
| --- | --- |
For the Total, 53% are NAIC 1, 5% NAIC 2, and 37% are held by non-insurance companies.
Page 23
| Appendix D<br><br><br>American Financial Group, Inc.<br> <br>Corporate Securities byCredit Rating & NAIC Designation by Industry 12/31/2020<br> <br>($ in millions) | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value By Industry | |||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Credit Rating (a) | OtherFinancials | Banking | AssetManagers | Technology | Insurance | Autos | Consumer | Energy | Healthcare | REITs | CapitalGoods | Communications | Other | Total | % Total | ||||||||||||||||
| Investment Grade | |||||||||||||||||||||||||||||||
| AAA | $ | — | $ | — | $ | — | $ | 16 | $ | — | $ | — | $ | — | $ | — | $ | 10 | $ | — | $ | — | $ | 13 | $ | 2 | $ | 41 | 2 | % | |
| AA | 12 | 28 | 8 | 23 | 35 | — | 5 | 37 | 12 | — | — | — | 3 | 163 | 7 | % | |||||||||||||||
| A | 39 | 121 | 53 | 24 | 96 | 28 | 50 | 25 | 22 | 36 | 63 | 26 | 37 | 620 | 27 | % | |||||||||||||||
| BBB | 65 | 190 | 147 | 81 | 21 | 119 | 36 | 33 | 45 | 23 | 13 | 37 | 77 | 887 | 39 | % | |||||||||||||||
| Subtotal | 116 | 339 | 208 | 144 | 152 | 147 | 91 | 95 | 89 | 59 | 76 | 76 | 119 | 1,711 | 75 | % | |||||||||||||||
| BB | 9 | — | — | 16 | 6 | 11 | 21 | 13 | 4 | — | 4 | 1 | 10 | 95 | 4 | % | |||||||||||||||
| B | — | — | — | 2 | — | — | 3 | 3 | 3 | 15 | — | — | 4 | 30 | 1 | % | |||||||||||||||
| CCC, CC, C | — | — | — | 2 | — | — | 2 | — | 1 | — | — | — | 8 | 13 | 1 | % | |||||||||||||||
| D | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | |||||||||||||||
| Subtotal | 9 | — | — | 20 | 6 | 11 | 26 | 16 | 8 | 15 | 4 | 1 | 22 | 138 | 6 | % | |||||||||||||||
| Not Rated (b) | 385 | — | — | 3 | 8 | — | 7 | — | — | 13 | 2 | — | 18 | 436 | 19 | % | |||||||||||||||
| Total | $ | 510 | $ | 339 | $ | 208 | $ | 167 | $ | 166 | $ | 158 | $ | 124 | $ | 111 | $ | 97 | $ | 87 | $ | 82 | $ | 77 | $ | 159 | $ | 2,285 | **** | 100 | % |
| Fair Value By Industry | |||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | OtherFinancials | Banking | AssetManagers | Technology | Insurance | Autos | Consumer | Energy | Healthcare | REITs | CapitalGoods | Communications | Other | Total | % Total | ||||||||||||||||
| 1 | $ | 432 | $ | 149 | $ | 62 | $ | 63 | $ | 131 | $ | 28 | $ | 55 | $ | 62 | $ | 45 | $ | 35 | $ | 63 | $ | 39 | $ | 39 | $ | 1,203 | 53 | % | |
| 2 | 69 | 190 | 146 | 81 | 22 | 119 | 36 | 33 | 45 | 24 | 14 | 37 | 91 | 907 | 40 | % | |||||||||||||||
| Subtotal | 501 | 339 | 208 | 144 | 153 | 147 | 91 | 95 | 90 | 59 | 77 | 76 | 130 | 2,110 | 93 | % | |||||||||||||||
| 3 | 9 | — | — | 14 | 4 | 11 | 20 | 13 | 3 | 5 | 4 | 1 | 11 | 95 | 4 | % | |||||||||||||||
| 4 | — | — | — | 2 | 8 | — | 5 | 3 | 4 | 23 | — | — | 4 | 49 | 2 | % | |||||||||||||||
| 5 | — | — | — | 6 | 1 | — | 8 | — | — | — | 1 | — | 12 | 28 | 1 | % | |||||||||||||||
| 6 | — | — | — | 1 | — | — | — | — | — | — | — | — | — | 1 | 0 | % | |||||||||||||||
| Subtotal | 9 | — | — | 23 | 13 | 11 | 33 | 16 | 7 | 28 | 5 | 1 | 27 | 173 | 7 | % | |||||||||||||||
| No designation (c) | — | — | — | — | — | — | — | — | — | — | — | — | 2 | 2 | 0 | % | |||||||||||||||
| Total | $ | 510 | $ | 339 | $ | 208 | $ | 167 | $ | 166 | $ | 158 | $ | 124 | $ | 111 | $ | 97 | $ | 87 | $ | 82 | $ | 77 | $ | 159 | $ | 2,285 | **** | 100 | % |
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||||
| (b) | For Other Financials, 99% are NAIC 1. | ||||||||||||||||||||||||||||||
| --- | --- |
For the Total, 87% are NAIC 1, 4% NAIC 2, 2% NAIC 3, 4% NAIC 4, 3% NAIC 5.
| (c) | Primarily relates to securities held by non-insurance companies.<br> |
|---|
Page 24
| Appendix E<br><br><br>American Financial Group, Inc.<br> <br>Asset-Backed Securitiesby Credit Rating & NAIC Designation by Collateral Type 9/30/2021<br> <br>($ in millions) | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value By Collateral Type | |||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Credit Rating (a) | CommercialReal Estate | SecuredFinancing(c) | Auto | TruPS | WholeBusiness | SingleFamilyRental | Railcar | ConsumerLoans | TripleNetLease | Aircraft | MortgageServicerReceivables | Other | Total | % Total | |||||||||||||||
| Investment Grade | |||||||||||||||||||||||||||||
| AAA | $ | 628 | $ | — | $ | 211 | $ | — | $ | — | $ | 128 | $ | — | $ | 40 | $ | 92 | $ | — | $ | 39 | $ | 152 | $ | 1,290 | 49 | % | |
| AA | 8 | 40 | 21 | 179 | 41 | 32 | — | 44 | 10 | — | — | 17 | 392 | 15 | % | ||||||||||||||
| A | — | 84 | 13 | 20 | 4 | — | 135 | 42 | 12 | 51 | — | 96 | 457 | 17 | % | ||||||||||||||
| BBB | — | 2 | — | — | 154 | — | — | — | — | 44 | 63 | 14 | 277 | 10 | % | ||||||||||||||
| Subtotal | 636 | 126 | 245 | 199 | 199 | 160 | 135 | 126 | 114 | 95 | 102 | 279 | 2,416 | 91 | % | ||||||||||||||
| BB | — | — | — | — | — | — | — | — | — | 4 | — | — | 4 | 0 | % | ||||||||||||||
| B | — | 1 | — | — | — | — | — | — | — | 9 | — | 1 | 11 | 1 | % | ||||||||||||||
| CCC, CC, C | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| D | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| Subtotal | — | 1 | — | — | — | — | — | — | — | 13 | — | 1 | 15 | 1 | % | ||||||||||||||
| Not Rated (b) | — | 211 | — | — | — | — | — | — | — | 3 | — | — | 214 | 8 | % | ||||||||||||||
| Total | $ | 636 | $ | 338 | $ | 245 | $ | 199 | $ | 199 | $ | 160 | $ | 135 | $ | 126 | $ | 114 | $ | 111 | $ | 102 | $ | 280 | $ | 2,645 | **** | 100 | % |
| Fair Value By Collateral Type | |||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | CommercialReal Estate | SecuredFinancing (c) | Auto | TruPS | WholeBusiness | SingleFamilyRental | Railcar | ConsumerLoans | TripleNetLease | Aircraft | MortgageServicerReceivables | Other | Total | % Total | |||||||||||||||
| 1 | $ | 502 | $ | 306 | $ | 50 | $ | 199 | $ | 45 | $ | 159 | $ | 135 | $ | 115 | $ | 114 | $ | 51 | $ | 39 | $ | 184 | $ | 1,899 | 87 | % | |
| 2 | — | 2 | — | — | 154 | — | — | — | — | 44 | 63 | 13 | 276 | 12 | % | ||||||||||||||
| Subtotal | 502 | 308 | 50 | 199 | 199 | 159 | 135 | 115 | 114 | 95 | 102 | 197 | 2,175 | 99 | % | ||||||||||||||
| 3 | — | — | — | — | — | — | — | — | — | 4 | — | — | 4 | 0 | % | ||||||||||||||
| 4 | — | 1 | — | — | — | — | — | — | — | 9 | — | 1 | 11 | 1 | % | ||||||||||||||
| 5 | — | — | — | — | — | — | — | — | — | 2 | — | — | 2 | 0 | % | ||||||||||||||
| 6 | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| Subtotal | — | 1 | — | — | — | — | — | — | — | 15 | — | 1 | 17 | 1 | % | ||||||||||||||
| Total insurance companies | $ | 502 | $ | 309 | $ | 50 | $ | 199 | $ | 199 | $ | 159 | $ | 135 | $ | 115 | $ | 114 | $ | 110 | $ | 102 | $ | 198 | $ | 2,192 | 100 | % | |
| Total non-insurance | 134 | 29 | 195 | — | — | 1 | — | 11 | — | 1 | — | 82 | 453 | ||||||||||||||||
| Total | $ | 636 | $ | 338 | $ | 245 | $ | 199 | $ | 199 | $ | 160 | $ | 135 | $ | 126 | $ | 114 | $ | 111 | $ | 102 | $ | 280 | $ | 2,645 | |||
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||
| (b) | 85% of not rated securities are NAIC 1 and 14% are held by<br>non-insurance companies. | ||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||
| (c) | Secured Financings are privately placed funding agreements secured by assets including Single Family Rental<br>properties, Bank Loans, Bank Trust Preferreds, Commercial and Residential Mortgages. | ||||||||||||||||||||||||||||
| --- | --- |
Page 25
| Appendix F<br> <br>American Financial Group,Inc.<br> <br>Asset-Backed Securities by Credit Rating & NAIC Designation by Collateral Type<br><br><br>12/31/2020<br> <br>($ in millions) | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value By Collateral Type | |||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Credit Rating (a) | CommercialReal Estate | SecuredFinancing (c) | TruPS | SingleFamilyRental | WholeBusiness | Railcar | ConsumerLoans | TripleNetLease | Aircraft | MortgageServicerReceivables | Auto | Other | Total | % Total | |||||||||||||||
| Investment Grade | |||||||||||||||||||||||||||||
| AAA | $ | 427 | $ | — | $ | — | $ | 151 | $ | — | $ | — | $ | 53 | $ | 74 | $ | — | $ | 39 | $ | 29 | $ | 116 | $ | 889 | 43 | % | |
| AA | 6 | 61 | 173 | 46 | 41 | — | 33 | 11 | — | — | 20 | 16 | 407 | 20 | % | ||||||||||||||
| A | — | 13 | 36 | 5 | 4 | 140 | 22 | 17 | 38 | — | 3 | 52 | 330 | 16 | % | ||||||||||||||
| BBB | — | — | — | — | 134 | — | — | — | 30 | 40 | — | 4 | 208 | 10 | % | ||||||||||||||
| Subtotal | 433 | 74 | 209 | 202 | 179 | 140 | 108 | 102 | 68 | 79 | 52 | 188 | 1,834 | 89 | % | ||||||||||||||
| BB | — | — | — | — | — | — | — | — | 2 | — | — | — | 2 | 0 | % | ||||||||||||||
| B | — | 2 | — | — | — | — | — | — | 7 | — | — | 1 | 10 | 1 | % | ||||||||||||||
| CCC, CC, C | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| D | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| Subtotal | — | 2 | — | — | — | — | — | — | 9 | — | — | 1 | 12 | 1 | % | ||||||||||||||
| Not Rated (b) | — | 167 | — | — | — | — | — | — | 3 | — | — | 31 | 201 | 10 | % | ||||||||||||||
| Total | $ | 433 | $ | 243 | $ | 209 | $ | 202 | $ | 179 | $ | 140 | $ | 108 | $ | 102 | $ | 80 | $ | 79 | $ | 52 | $ | 220 | $ | 2,047 | **** | 100 | % |
| Fair Value By Collateral Type | |||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAIC designation | CommercialReal Estate | SecuredFinancing (c) | TruPS | SingleFamilyRental | WholeBusiness | Railcar | ConsumerLoans | TripleNetLease | Aircraft | MortgageServicerReceivables | Auto | Other | Total | % Total | |||||||||||||||
| 1 | $ | 433 | $ | 241 | $ | 209 | $ | 201 | $ | 46 | $ | 140 | $ | 108 | $ | 102 | $ | 37 | $ | 40 | $ | 52 | $ | 214 | $ | 1,823 | 89 | % | |
| 2 | — | 1 | — | — | 133 | — | — | — | 31 | 39 | — | 4 | 208 | 10 | % | ||||||||||||||
| Subtotal | 433 | 242 | 209 | 201 | 179 | 140 | 108 | 102 | 68 | 79 | 52 | 218 | 2,031 | 99 | % | ||||||||||||||
| 3 | — | — | — | — | — | — | — | — | 2 | — | — | — | 2 | 0 | % | ||||||||||||||
| 4 | — | 1 | — | — | — | — | — | — | 7 | — | — | 2 | 10 | 1 | % | ||||||||||||||
| 5 | — | — | — | — | — | — | — | — | 2 | — | — | — | 2 | 0 | % | ||||||||||||||
| 6 | — | — | — | — | — | — | — | — | — | — | — | — | — | 0 | % | ||||||||||||||
| Subtotal | — | 1 | — | — | — | — | — | — | 11 | — | — | 2 | 14 | 1 | % | ||||||||||||||
| No designation (d) | — | — | — | 1 | — | — | — | — | 1 | — | — | — | 2 | 0 | % | ||||||||||||||
| Total | $ | 433 | $ | 243 | $ | 209 | $ | 202 | $ | 179 | $ | 140 | $ | 108 | $ | 102 | $ | 80 | $ | 79 | $ | 52 | $ | 220 | $ | 2,047 | **** | 100 | % |
| (a) | If two agencies rate a security, the rating displayed above is the lower of the two; if three or more agencies<br>rate a security, the rating displayed is the second lowest. | ||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||
| (b) | 98% of not rated securities are NAIC 1. | ||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||
| (c) | Secured Financings are privately placed funding agreements secured by assets including Single Family Rental<br>properties, Bank Loans, Bank Trust Preferreds, Commercial and Residential Mortgages. | ||||||||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||||||||
| (d) | Primarily relates to securities held by non-insurance companies.<br> | ||||||||||||||||||||||||||||
| --- | --- |
Page 26
| Appendix H<br> <br>American Financial Group,Inc.<br> <br>Real Estate-Related Investments<br><br><br>12/31/2020<br> <br>($ in millions) |
|---|
Investments accounted for using equity method (Real Estate Funds/Investments) (a)
| Investment Type | Book Value | % ofBook Value | Occupancy (b) | Collection Rate (c) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Multi-family | $ | 793 | 87 | % | 96 | % | 98 | % | |||
| Fund Investments | 38 | 4 | % | — | — | ||||||
| Student Housing | 28 | 3 | % | 94 | % | 98 | % | ||||
| Land—Development | 17 | 2 | % | — | — | ||||||
| QOZ Fund—Development | 16 | 2 | % | — | — | ||||||
| Office | 15 | 1 | % | 90 | % | 100 | % | ||||
| Hospitality | 8 | 1 | % | — | — | ||||||
| Total | $ | 915 | **** | 100 | % |
Real Estate
| Property Type | Book Value | % ofBook Value | Debt | ||||
|---|---|---|---|---|---|---|---|
| Marina | $ | 63 | 39 | % | $ | — | |
| Resort & Marina | 56 | 34 | % | — | |||
| Hotel | 23 | 14 | % | — | |||
| Office Building | 17 | 10 | % | — | |||
| Land | 4 | 3 | % | — | |||
| Total | $ | 163 | **** | 100 | % | $ | — |
Mortgage Loans
| Property Type | Book Value | % of<br>Book Value | Loan ToValue | |||||
|---|---|---|---|---|---|---|---|---|
| Hospitality | 160 | 42 | % | 56 | % | |||
| Multi-family | 138 | 37 | % | 68 | % | |||
| Office | 73 | 19 | % | 72 | % | |||
| Retail | 6 | 2 | % | 57 | % | |||
| Total | $ | 377 | **** | 100 | % | **** | 64 | % |
Currently, no loans are receiving interest deferral through forbearance agreements.
| (a) | Total investments accounted for using the equity method is $1.2 billion, the amounts presented in this<br>table only relate to real estate funds/investments. |
|---|---|
| (b) | Occupancy as of 12/31/20 |
| --- | --- |
| (c) | Collections for October—December |
| --- | --- |
| (d) | Based on most recent property appraisals, the vast majority of which are prior to March 2020.<br> |
| --- | --- |
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